Despite the recent crypto market meltdown, the African blockchain scene has continued to attract significant funding, with venture capitalists (VCs) still betting on the sector’s future.
During the first half of 2022, African blockchain companies attracted $304 million in funding, almost triple the $127 million received across 2021, Nation reported on August 3.
In the first three months, VCs pumped $91 million into different companies, growing 134% in the second quarter to $213 million. Interestingly, during the second quarter, the crypto market recorded one of its worst returns, led by assets like Bitcoin (BTC), which plunged by 56% in the three months.
KuCoin leads in funding
Some leading funding rounds saw Seychelles-based cryptocurrency exchange KuCoin raising a record $150 million. The funding was dubbed Africa’s first blockchain ‘mega deal.’
Additionally, the Pan-African crypto exchange Mara raised $23 million, while the Jambo startup raised $30 million. Elsewhere, Nigerian startup, Afriex raised $10 million during the second quarter.
Despite the record funding, Africa only accounted for 0.5% of blockchain founding globally during the first six months of 2022.
This comes after the African Blockchain Report noted that the continent’s crypto sector is mainly driven by the region’s economic challenges like rising inflation and devaluation of local currencies.
“The lack of common legacy financial systems and an enormous population, primarily unbanked, all contribute to the popularity and growth of cryptocurrencies on the continent,” said the report.
Increased adoption of cryptocurrencies in Africa
Overall, several African countries are witnessing increased crypto adoption as residents aim to integrate digital assets into their normal financial engagements. As reported by Finbold on August 3, Nigeria ranks as the most cryptocurrency-obsessed country globally, with a Google trends search score of 371.
Despite the recent market meltdown, investors are showing interest in digital assets betting on a possible rally in future.
Following the concentration of crypto investors in Africa, most countries still have a vague regulatory approach. In this line, countries like South Africa have announced plans to regulate and integrate the sector into the mainstream financial system.