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US Recession Fears Set to Close Funding Tap for African Startups

  • Western venture funds provided 80% of 2021’s record $5 billion
  • Funding that drove explosive startup growth likely to dry up
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Odds of Recession Soar to 72% Under Biden

The flood of venture capital into African tech companies over the past three years is drying up as western investors retreat amid the global market downturn.

Some 80% of last year’s record $5 billion put into companies on the continent came from international funds like Tiger Global and Sequoia Capital, according to data from the East Africa Venture Capital Association. Now, fears of a recession, soaring inflation and rising interest rates have made fundraising harder, and African startups -- like the Nigerian fintech firms that grew explosively in recent years -- are expected to suffer.