African technology startup investment platform Partech Africa’s recently released Africa technology venture capital report reveals that, despite the global venture capital downturn, the African technology ecosystem grew faster than all other markets globally.

Total funding invested into technology startups during 2022 in Africa reached $6.5-billion – an increase of 8% year-on-year, spread across 764 deals – compared with 724 deals in 2021.

The report, consisting of disclosed and confidential deals, saw debt funding more than double in volume, reaching $1.55-billion through 71 deals – growth of 65% year-on-year.

In comparison, equity rounds showed a slight decline in 2022, as 653 African technology startups raised $4.9-billion – 6% down year-on-year, in 693 equity rounds – an increase of 2% year-on-year.

Focusing on equity funding, the report revealed the ecosystem was still accelerating during the first half of 2022 compared to 2021, with the year-on-year comparison showing the first and second quarters increasing 127% year-on-year and 83% year-on-year, respectively.

However, the global venture capital slowdown stifled growth in activity in the third quarter, which declined 65% year-on-year; while the fourth quarter declined 35% year-on-year.

In 2022, Partech reports, fundraising activities remained flat across all stages. At $1.4-million, seed funding ticket sizes averaged higher in 2022 at 12% up on 2021 levels, while Partech’s Series A remained the same at $8.5-million.

More developed fundraising stages reverted to 2019 levels, as Series B and growth round sizes dropped by 23% and 50% year-on-year, respectively.

In addition, Partech notes that 2022 witnessed a significant reduction in the number of megadeals (over $100-million) with only seven deals, compared with 14 in 2021.

Speaking on the launch of the yearly report, Partech general partner Tidjane Deme said that 2022 was a particularly challenging year for the venture ecosystem worldwide, as venture and growth investors scaled back their investment by a third.

“However, by comparison, our report revealed that the African tech ecosystem showed great resilience, as more investors have doubled their commitment to the continent by investing in local teams and funds dedicated to the market, proving to be the best way forward,” he said.

Overall, Nigeria, South Africa, Egypt and Kenya remain the top investment destinations in Africa, with a share of total volume staying relatively steady at 72%.

Nigeria retained the top rank, bringing in $1.2-billion in capital, despite a decline of 36% from 2021; while South Africa, Egypt, and Kenya each attracted over $700-million in funding.

Ghana completed the top five with just over $200-million.

Overall, 28 countries attracted equity funding in 2022, 13 of them in Francophone Africa.

In light of the market downturn, the report’s findings also revealed that fintech, which has historically attracted sizable investments, was the most impacted by the slowdown in the number of large rounds.

However, fintech remains the most funded sector in Africa, across all sources of capital, with 39% of the total equity volume ($1.9-billion) and 45% of the total debt volume ($691-million).

The report's findings also show that female-founded startups raised 22% of all equity rounds in 2022 – up 2 percentage points from 20% in 2021. They also contributed $644-million, or 13%, of the total equity funding – down 3 percentage points from 16% in 2021.

Despite a slowdown in the growth rate of equity investors, Africa’s technology ecosystem attracted 1 149 unique investors for the first time – up 29% year-on-year.