The world of blockchain venture funding in Africa has witnessed a dramatic downturn in the first half of 2024. According to a report released by Swiss blockchain venture capital firm CV VC on July 16, African blockchain venture funding saw a staggering 74% decrease compared to the same period in 2023.
Sharp Decline in Funding
In the first half of 2024, Africa secured $34.7 million in blockchain venture funding. This is a sharp fall from the $135.4 million raised in the same period the previous year. The significant drop highlights the challenges the African blockchain venture space faces amidst a global downturn in blockchain investments.
Despite the decline in funding, the CV VC report noted a 9% increase in the number of deals made in the region. This suggests that while less money is being invested, the interest in blockchain ventures in Africa remains relatively strong.
Broader Funding Decline
The drop in African blockchain venture funding is part of a broader trend affecting the global blockchain industry. CV VC reported that worldwide blockchain funding plummeted from $10.66 billion in the first half of 2023 to just $5.74 billion in the same period in 2024. This 64% decrease reflects a widespread hesitancy among investors to fund blockchain projects in the current economic climate.
Moreover, the number of blockchain venture capital deals globally also fell significantly. There were only 678 deals recorded in the first half of 2024, compared to 1,306 deals in the same period in 2023, marking a 49% drop.
Africa’s Relative Performance
Interestingly, despite the downturn, African blockchain venture funding accounted for 6.4% of all venture funding and 12.5% of regional deals globally. CV VC pointed out that this is an all-time high in deal share for Africa, indicating that the region is performing better than its global counterparts in certain aspects.
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According to CV VC, “the higher percentage of blockchain venture activity in Africa suggests a greater regional focus on blockchain solutions, driven by unique challenges that this technology can address.” This emphasis on blockchain technology as a solution to regional issues underscores the potential for growth and innovation within the African blockchain venture space.
Rise in Crypto Startups
Despite the overall decline in funding, Africa has seen an increase in its share of crypto startups. On July 10, blockchain startup accelerator and founder community Alliance reported a 5.2% increase in Africa’s share of crypto startups. This rise suggests that entrepreneurial activity in the African blockchain venture sector remains robust, even in the face of reduced funding.
In comparison, Europe has emerged as the leading region for new crypto startups, surpassing the United States and Canada. Asia follows with a 26.8% share. This shift in the global landscape of crypto startups highlights Africa’s growing importance as a hub for blockchain innovation and entrepreneurship.
Future Prospects for African Blockchain Venture Funding
The future of African blockchain venture funding remains uncertain. The current economic conditions and global investor sentiment will likely continue influencing the amount of capital flowing into the sector. However, the increase in the number of deals and the rise in crypto startups indicate a resilient and dynamic environment.
While funding levels have dropped, the commitment to blockchain technology in Africa suggests a long-term potential for growth. The unique challenges faced by the continent, from financial inclusion to supply chain transparency, make blockchain a valuable tool for innovation.
African Blockchain Venture In A Nutshell
In summary, African blockchain venture funding has experienced a significant decline in the first half of 2024, mirroring global trends in the blockchain industry. However, the region’s increased share of deals and the rise in crypto startups reflect a resilient and forward-looking sector. As Africa continues to address its unique challenges with blockchain solutions, the potential for growth and innovation in the African blockchain venture space remains promising.
The decline in funding may be a temporary setback. Still, the ongoing interest and activity in blockchain ventures in Africa suggest that the continent is well-positioned to become a significant player in the global blockchain landscape. The commitment to leveraging blockchain technology to solve regional problems highlights the enduring relevance and potential of the African blockchain venture ecosystem.
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