In 2023, Seychelles and South Africa solidified their positions as the primary hubs for blockchain innovation and investment in Africa, collectively accounting for 95% of the continent’s venture funding in the sector. According to the CV VC Africa Blockchain report, these two countries alone contributed to the majority of the $135 million raised in the industry across the continent, with Seychelles securing the top spot for the sixth consecutive year.
Key Insights and Funding Breakdown
Seychelles blockchain startups were particularly successful, raising a substantial $100 million from six deals. Notable contributions included $28 million raised by Beldex, $10 million by the crypto exchange Bitget, and a remarkable $83 million by Scroll. South African startups also made significant strides, raising $29 million from four deals. Key players included Momint, which secured $2.7 million, and NFTfi, which raised $18 million.
Regulatory Environment and Investment Attraction
A critical factor driving this investment influx in Seychelles and South Africa is the regulatory environment. Both countries are among the six African nations where crypto is legal, providing a stable and assured regulatory framework that is crucial for attracting investors. As Brenton Naicker, principal and head of growth at CV VC, highlighted, regulatory assuredness is a significant determinant for investment in blockchain startups.
Broader Continental Trends
Despite the favorable developments in Seychelles and South Africa, the broader African landscape for blockchain remains mixed. While regulations are easing in some regions, crypto is still banned in 12 countries, and 36 others have uncertain regulatory frameworks. This creates a varied investment climate across the continent.
Emerging Markets: Nigeria on the Rise
While Seychelles and South Africa dominate the blockchain scene, other African markets, such as Nigeria, are beginning to attract attention. In the first half of 2024, Nigerian blockchain startups raised $13 million from five deals, accounting for 38% of the total funding by African startups. Notable Nigerian startups that received funding include Zap Africa, a fiat-to-crypto exchange, which raised $300,000, and Seso Global, a real estate tokenization startup, which secured $720,000.
Future Outlook
The dominance of Seychelles and South Africa in blockchain investment is expected to continue, but the rise of other markets like Nigeria indicates a broader growth in blockchain technology across the continent. The continued easing of regulatory frameworks and the increasing interest from investors could further diversify and expand the blockchain ecosystem in Africa.