Although Africa is yet to see a major blockchain deal, crypto unicorns are expected to emerge in the next 2-3 years.
As Africa continues adopting blockchain and cryptocurrencies, venture funding is now flowing into the continent faster. According to a new report released by Crypto Valley Venture Capital (CV VC) and Standard Bank, Q1 2022 received more venture funding compared to Q1 of 2021.
The report, which is titled “The African Blockchain Report 2021,” indicates that blockchain startups raised USD 91 million in Q1 of 2022. This was a 1,668% year-on-year jump in cash flow when compared to the 149% growth reported in Q1 of 2021. According to CV VC, this is a jump of more than 11 times.
Venture Funding Increasing, Poor Infrastructure Offers Startups a Chance to Fill the Void
Although Africa is yet to ink a major deal, the report shows that unicorns could emerge in the next two-three years because of the growing interest from venture capitalists.
According to Gideon Greaves, the managing director of CV VC, blockchain funding in Africa surpassed other types of startup funding. After working in a venture capital that targets blockchain projects, Greaves pointed out that the region has an excellent opportunity to enter the market faster via blockchain.
“We see this development as a key enabler for African enterprises, giving them rapid entry to markets by using blockchain as the catalyst to build new businesses,” explained Greaves.
Because of poor infrastructure in Africa, the startups have the perfect chance to fill the gap with innovative technologies. CV AV posits that Africa has the right tools, motivation, and population to form large firms that serve millions of people. In the next five years, Greave expects Africa to become the leading region taking advantage of blockchain technology.
In other related news, venture capital firms have recently invested USD 23 million to create a crypto exchange platform, Mara, which will offer crypto trading opportunities in Kenya and Nigeria.
Another report indicated that the lack of financial services infrastructure in Nigeria had boosted the adoption of cryptocurrencies in the country. Some citizens in the country are now using cryptos to store value and transfer assets.