A new report from African digital economy consultancy, TechCabal Insights reveals that acquisitions have become more frequent in Africa’s tech ecosystem, showing signs of a maturing market.
According to the report, 2021 saw 32 acquisition deals on the continent. At the end of Q3 2022, there were about 43 acquisition deals, signaling a consolidation trend.
After two years of continuous growth in VC investment, funding announcements have hit a plateau. Startups have resorted to cutting costs to extend their runway, and acquisition deals have become necessary for survival, particularly with startups operating in the same market. The number of acquisitions between startups operating in the same market increased from 31% in Q2 to 52% in Q3 2022.
The State of Tech in Africa Report also found that the average seed ticket size remained stable at $2,5-million in Q2 and $2,7-million in Q3.
Olanrewaju Odunowo, head of TechCabal Insights, comments: “When it comes to Africa’s evolving tech ecosystem, appropriate context and nuances must be taken into account. Data without context is imbalanced and misleading and can lead to the wrong outcomes. Beyond crunching the numbers, we have gathered robust insights drawn from primary interviews with leading industry experts. Our aim with this report is to present easy-to-digest insights and data points that anyone – from founders to investors – will find valuable.”