Lagos tech ecosystem worth $8.4bn as early stage funding records 227% increase in Sub-Saharan Africa between 2018-2022

Omoleye Omoruyi
Africa's venture funding

Sub-Saharan Africa has seen a 227% increase in early-stage funding amount between 2018 and 2022 according to a report by Startup Genome published in 2023, an indication that the funding scene will continue to experience tremendous growth.

As expected, Fintech is the highest-performing sub-sector in the region, comprising 41% of total tech startup deals in the period 2018–2022.

Sub-Saharan Africa’s biggest exit and second biggest deal during this period emerged from Nairobi: Payments startup DPO was acquired by Network International in 2021 for $291 million and Sun King raised $499 million in total VC funding, including a total of $330 million in Series D rounds in 2022.

Lagos-based Opay announced the biggest deal in August 2021 – $400 million (Series C). Also, Lagos-founded Fintech Flutterwave raised a $250 million Series D in February 2022, taking its valuation to over $3 billion.


  • No sub-Saharan Africa ecosystem, including the top five – Nairobi, Lagos, Cape Town, Johannesburg, Accra – made it into the top 30+ runners-up global ranking. But, the region recorded significant activity: a 43.8% increase in early-stage deal count.
  • Lagos is sub-Saharan Africa’s leader in ecosystem value and early-stage funding ($8.43 billion), while Nairobi leads in ecosystem knowledge and performance.
  • Nairobi leads the top five ecosystems by VC funding per capita.
  • The top five emerging ecosystems are Kampala, Dar es Salaam, Abidjan, Abuja, and Dakar.

Nairobi dominates Kenya’s startup ecosystem and is one of the leading tech cities in Africa. The capital city is home to 97% of the country’s startups, as well as regional offices of many multinational companies.

GSER 2023
Sub-Saharan Africa increased 227% in early-stage funding amount from 2018-2022
Sub-Saharan Africa increased 227% in early-stage funding amount from 2018-2022


According to a Disrupt Africa 2022 report, Kenya is one of the four leading startup ecosystems on the continent when it comes to funding, with 242 individual Kenyan startups having secured investment between January 2015 and mid-November 2022. Those startups secured a combined US$1,281,918,200 between them, a figure bettered in that time only by Nigeria.

Per the report, Fintech is the most populated sector in the Kenyan startup landscape, with 93
startups make up 30.2% of the country’s ventures. This figure is three times higher
than the next biggest sectors, e-health and agri-tech.

Nairobi is the biggest ecosystem in the country and is valued at $6.98 billion measured by economic impact.

Key activity:

  • In January 2023, the VC fund and accelerator Catalyst Fund announced a $2 million investment into 10 startups working on improving the resilience of climate-vulnerable communities in Africa.
  • The Nairobi County Government will issue a green bond of $1.2 billion to finance environmental infrastructure and accelerate the green transition. 
  • Under the UK-Kenya Strategic Partnership, the UK Government will commit KES 2 billion ($16.4 million) to lower investment risk and unlock KES 12 billion ($98.6 million) of climate finance for Kenyan projects.
  • The flagship project, BasiGo, has raised $11 million over four rounds. Sun King, which sells, installs, and finances solar home systems, has raised $577 million over nine rounds and raised sub-Saharan Africa’s biggest round in 2022 in a December $260 million Series D.


According to StartupBlink in a 2023 report, Lagos is still the only African city ranked in the global top 100 ecosystems, while Nigeria has five cities in the global top 1,000 this year.

As the top city in Western Africa, Lagos expanded its score gap with 2nd ranked Accra from 279.2% to 386.1%.


Adenike Adeyemi, Executive Director, FATE Foundation, attributes the leadership of Lagos’ ecosystem to dynamism and resilience.

“Lagos is home to dynamic and resilient startups that, despite a challenging macro environment, continue to lead innovation across many sectors, including financial services, health, climate change, and education. They do so not just within Nigeria but across the continent.”

Lagos is valued at $8.4 billion.

Key activity:

  • Vendease secured $30 million in Series A funding in September 2022 and vehicle-financing startup Moove secured $30 million in a funding round in December 2022, bringing its total raised to $230 million.
  • In 2022, the EU announced an €820 million ($861.9 million) investment in Nigeria’s digital transformation.
  • In October 2022, the Lagos government announced the Lagos State Venture Capital Fund.
  • Honeywell Group partnered with the Lagos Government and Lagos Innovates to help young entrepreneurs develop successful startups.
  • The Nigerian Startup Act, legislated on October 19, 2022, aims to empower entrepreneurship in the country through a legal and institutional framework for the development and operations of Nigerian startups.
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The Fintech sub-sector in Lagos is ranked 38th in the global ecosystem, followed by the Transportation industry which is ranked 58th globally, while Ecommerce & Retail is ranked 62nd in the world, according to StartupBlink.

Cape Town

Cape Town is South Africa’s foremost technology hub and home to many local and international tech companies. It is also Southern Africa’s leading tech hub and ranked 136th worldwide.

Ian Merrington, CEO, UVU Africa Group, claims Cape Town is often referred to as the tech capital of Africa because innovators have the opportunities to ‘thrive and grow’.

“Cape Town is often referred to as the tech capital of Africa, with a vibrant ecosystem where tech entrepreneurs can thrive and grow sustainable businesses.

Cape Town is valued at $3.36 billion.

Key activity:

The trajectory of the 227% increase in sub-Saharan Africa (per GSER 2023)

In 2018, Seed funding in sub-Saharan Africa was valued at $0.1 billion, Series A – $0.1 billion, and Series B+ – $0.5 billion.

In 2019, Seed funding slightly increased to $0.2 billion, Series A -$0.4 billion, and Series B+ – $0.5 billion.

Sub-Saharan Africa VC funding amount (2018-2022)

There was a drop in Seed funding in 2020 as it dropped to $0.1 billion, Series A – $0.3 billion, and Series B+ – $0.4 billion.

The post-pandemic period experienced a slight surge as Series B+ funding shot up to $1.4 billion, while Seed funding stood at $0.3 billion and Series A was valued at $0.4 billion.

2022 was predicted to be the magic year for Venture funding in Africa, but it failed to hit the jackpot. In fact, there was a 6% drop overall, so Series B+ funding fell to $1.3 billion, Seed funding – $0.3 billion and Series A – $0.4 billion.

Summary of findings per the GSER report:

  • Despite the overall economic downturn, three sub-sectors increased in the overall number of VC deals from 2021 to 2022: Gaming (+13%), Blockchain (+8%), and Fintech (+4%).
  • Reflecting AI’s increasing use and intersection with other sub-sectors, AI & Big Data is the sub-sector with the highest count of total VC deals, making up 28% of the global share in 2022. It also has the highest growth in number of exits, at 74%, from 2017–2018 to 2021–2022, and experienced a 34% increase in Series A count for the same period.
  • As Deep Tech innovations become more integrated into the startup world, Deep Tech’s exit amount has grown faster than non-Deep Tech technologies from 2017–2018 to 2021–2022, at 326% vs. 225%.
  • Advanced Manufacturing & Robotics is the fastest-growing sub-sector in terms of Series A amount, up 168% from 2017–2018 to 2021–2022.
  • Fintech has grown significantly in sub-Saharan Africa and Latin America, making up 41% and 37% of global Series A deal count respectively from 2017–2018 to 2021–2022.
  • Although Edtech was widely expected to thrive during and post-pandemic, its Series A funding amount decreased 44% from 2017–2018 to 2021–2022.

Overall, and notwithstanding a funding drought, Africa’s tech ecosystem is growing rapidly, and there are many exciting things on the horizon. Here are a few trends to watch:

  • The rise of new tech hubs. In recent years, we’ve seen the emergence of new tech hubs across Africa, outside of the traditional tech hubs like Lagos, Nairobi, and Cape Town. These new hubs are located in countries like Rwanda, Ghana, and Senegal, and they’re helping to drive innovation and entrepreneurship across the continent.
  • The growth of the fintech sector. Fintech is one of the most vibrant sectors in Africa’s tech ecosystem, and it’s showing no signs of slowing down.
  • The expansion of the cleantech sector. Africa is home to a number of promising cleantech startups, and this sector is poised for growth in the coming years. Cleantech startups are developing solutions to address some of Africa’s most pressing challenges, such as access to energy and water.
  • The increasing importance of data. Data is becoming increasingly important in Africa’s tech ecosystem. Startups are using data to improve their products and services, and governments are using data to make better decisions. As the availability of data increases, we can expect to see even more innovation in Africa’s tech ecosystem.

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