Africa’s emerging influence in the global blockchain industry is reflected in the continent’s highest-ever share of blockchain venture capital (VC) rounds on record.
According to the recent report by CV VC, a Swiss blockchain VC firm, in H1 2024, Africa recorded 1.8% of the global blockchain VC deal count, an increase from 1.3% in 2023.
The indicator is significant for the continent, showing its growing participation in progressive investment rounds. Moreover, in the first half of 2024, blockchain accounted for 6.4% of Africa’s total venture funding and 12.5% of all deals, surpassing global averages of 3.5% and 5.9%. That shows the continent’s dedication to promising innovations despite unfavourable macroeconomic conditions.
Africa’s overall participation in the global venture ecosystem is also growing, having reached an all-time high share of 0.62% of all global VC deals this year.
It is notable that African blockchain ventures also began to rebound. They raised only $135.4 million from 17 deals in 2023. However, in the first half of 2024, local startups managed to secure $34.7 million from 12 deals. That marked a 9% increase in deal volume from the previous year’s first half.
Africa’s prominence on the global blockchain VC scene has been rising steadily for a while now. In 2022, for example, Africa was the only region globally to have experienced an explosion in blockchain venture funding. Whereas the whole world saw funding fall 35% to $415B, VC investors in Africa increased their funding by 34% to reach $3.14B. The continent’s blockchain venture funding increased by 429% in 2022, reaching $474M in the total value of funding deals. Moreover, 2022 brought Africa the first two blockchain unicorns – Kucoin and Scroll.io.
The African blockchain landscape continued to form and change shape in 2023 and H1 2024. At present, more funding flows are going towards startups in the verticals of blockchain networks (45.9%), gaming, non-fungible tokens (NFTs) and the metaverse (18.1%). Decentralized finance (DeFi) still accounted for a sizeable 18.2% share of blockchain VC investment in 2023 and H1 2024, however, the segment has lost momentum this year.
Industry leaders emphasize blockchain’s transformative potential in Africa’s socioeconomic systems and financial sector and foresee continued growth due to increasing regulations clarity and growing awareness of blockchain’s benefits.
“Africa’s vast natural asset, its people, coupled with the growing recognition of Africans’ technological ability, resilience, and spirit, positions blockchain as a pivotal tool to support socio-economic advancement, not just for Africa but as a solution to many of the ill winds blowing globally.”
Mathias Ruch, CEO of CV VC
Regulatory advancements are one of the main facilitators of the sector’s growth. While many continent nations remain cautious about blockchain implementation, more and more governments are choosing to establish clear regulatory frameworks instead of banning crypto.
In late 2023, after almost two years of a comprehensive ban prohibiting local banks from engaging with digital currencies, the Central Bank of Nigeria (CBN) lifted the restrictions, allowing lenders to open accounts for crypto firms.
Namibia, Morocco, and Kenya are all working on new bills to legalize and establish regulations for cryptocurrencies and other virtual assets.
“ We expect to see blockchain-enabled use cases grow as regulations become clearer and awareness of the benefits grows among our customer base. The regulatory landscape is critical to our expanded participation, and there’s a great overview of it in this report, which we are very proud to co-publish with CV VC.”
Rob Downes, Head of Digital Assets, CIB Africa, Absa Group
One of the most fervent crypto adopters in Africa is Nigeria. The evidence suggests people in Nigeria use crypto as an alternative to unstable naira and other national economic challenges. Statistics show that interest in Bitcoin and stablecoins rose abnormally when the naira’s value sharply decreased, e.g. in June and July of 2023. Ghana, where inflation reached 29.8% in 2022 — its highest level in two decades – also ranks high in the crypto adoption index, along with Kenya and South Africa, which face similar problems.
