than doubled the amount of debt they raised last year, a surge that may continue as an economic slowdown makes equity funding more expensive and unsustainable over the long term.
Companies on the continent raised US$1.55-billion in 71 debt deals in 2022, suggesting it’s become a solid alternative source of capital for African technology start-ups, venture capital firmThe surge helped the African technology sector become “one of the very few, if not the only, VC markets to boast net growth funding in 2022”, the Paris-based company said.VC funding grew 8% to $6.
The number of active debt investors on the continent is growing 2.5 times year on year, with a good mix of local debt institutions, international lenders and development finance institutions, the report said. Most of last year’s debt financing went into fintech and clean technology start-ups such as Moove.Africa and D.Light, the study found.Kenya attracted more debt than any other African country, taking almost 40% of the total amount raised through 15 deals, while Nigeria received the most equity funding, getting $1.2-billion — a 36% decline, compared to a year earlier, in a 189 funding rounds, the report said.