REPORT | African Blockchain Startups Decrease to 5.5% as Fintech Ventures Increase Over 17% in 2023

The number of active fintech-focused blockchain startups in Africa have declined between 2021 and 2023, a new report tracking the growth of Africa’s fintech ecosystem over the last two years has determined.

According to the report, the number of blockchain startups active in Africa leapt 150% to 45 (9.2% of the total) between 2017 and 2019. However, the volatility in the cryptocurrencies markets and as the excitement over crypto continues to fade, there has been a notable decline of the sector on the continent.

The number of active blockchain ventures fell to 42 (7%) in 2021, and has now fallen further with 37 startups accounting for just 5.5% of the total. More than half of the startups are from Nigeria, with 21 startups representing 58% of active companies, the report has revealed.

Moreover, the Nigeria number represents a huge leap from 17.8% in 2019 and 11% in 2017, which according to the report, shows that blockchain is ‘alive and well’ in the West-African nation. South Africa with 9 startups, and Kenya with 3 startups are the domiciles of the remaining blockchain startups in Africa.

When it comes to leading categories in fintech funding, blockchain was the third most funded category between 2015-2023 accounting for 4.9% of the total African fintech funding.

Overall, the total count of fintech startups in Africa rose to 678 in 2023, in contrast to the previous count of 576 in 2021. This marks a notable increase of 17.7 percent.

The 17.7% increase in fintech startups mirrors the growth rate observed between 2019 and 2017 during which the number of active ventures rose by 17.3%. In total, the count of active fintech startups in Africa has surged by 125.2% from 2017 to 2023.

“This growth is taking place across the continent, with all major markets bar South Africa posting an increase in the number of active ventures. Egypt and Nigeria are growing especially fast, with the number of fintech companies based in those countries leaping by 66.7 per cent and 50 per cent respectively over the course of the last two years,” the report said.

Nearly 40 percent of the currently operational fintech ventures were initiated between 2019 and 2021, the report indicated.

Out of the 576 startups that were part of the previous edition of the report tracking development between 2017 and 2019, a total of 115, equivalent to 20 percent, have ceased their operations since then.

NB: The blockchain research focussed on startups active in the blockchain and cryptocurrency space, including those that apply these technologies to other fields