JOHANNESBURG – African start ups attracted a record $5.2 Billion in venture capital last fiscal year. This is despite a downturn in investment in 2020 due to the pandemic. According to data from an industry group, there was a fivefold jump in investments.

Companies like Nigeria’s Paystack (acquired in 2020 by Stripe and Flutterwave, a fintech company valued at more than $3 billion) have fueled international interest in emerging businesses in Africa.

The African Private Equity and Venture Capital Association (AVCA), a group that promotes private capital on Africa, stated in a report: “African startups have raised more money in 2021 than in the previous seven years.”

The fintech sector has received a lot of attention from investors, which aims to provide financial services for the continent’s vastly unbanked populace. The data compiled and published by AVCA revealed that the financial industry accounted for nearly a third (60%) of investments in value, as well as a large portion of transactions by volume.

Nigeria was the top destination for African venture capital last year. It is a hub of fintech companies and beat South Africa as the most advanced economy on the continent.

Venture capital deals focused on early-stage rounds of funding. The late-stage capital market exploded in 2021. There was a near 40-fold increase of financing from Series C round.

Fintechs Chipper Cash and MFS Africa raised an aggregate $833 million through Series C rounds.

Deals of less than 1 million dollars accounted for nearly one third of all transactions volume-wise, but those of more than $50 million made up 62% of Africa’s total venture capital funding last year.