Domestic start-ups raised US$212million worth of capital in 2022 – an all-time record, the Ghana Innovation Ecosystem Report 2022 has shown.
According to the report, 71 percent of the total start-up funding came from venture capital firms, with financial technology firms (Fintechs) being the darling of the sector. They constituted 46 percent of the total investment due to the growth they offer venture funds.
Again, 45 percent of the capital was raised at the early stage— pre-seed and seed start-ups, with at least 15 established start-ups expanding their operations to 11 countries on the continent, the report said.
While Fintechs remain dominant, the most significant capital raised by a single start-up, US$35 million, came from mPharma – a healthtech. Ghana also maintained its position as the 5th venture capital market in Africa.
The gender dynamics in fundraising was, however, appalling with a paltry eight percent of the total funding going to female-led start-ups while gender-diverse teams raised nine percent of the total funding. Female-only teams raised 0.2 percent of the total funding.
Commenting on the development, Prof. Elikem Nutifafa Kuenyehia, Chairman of Keystone Solicitors, said the opportunities in the Ghanaian tech space are a biggest open secret in global tech investing.
According to the Africa Development Bank, outside of Nigeria, Ghana is the top destination for foreign direct investment in Western Africa. The country accounts for 31.5 percent of total foreign direct investment cash flows.
“I think we haven’t even begun to scratch the surface of opportunities,” he said. “What I am looking forward to seeing in the Ghanaian ecosystem in 2023, is more money – and a more diversified group of investors generally investing in Ghanaian start-ups and growth companies (not just tech companies). Entrepreneurs with viable propositions will attract money from a broader base of investors – smaller and individual investors who might previously have invested in government papers”.
Co-founder and Chief Executive Officer (CEO) of ScaleUp Africa, Ama Gyampo, said as a business development services and technical assistance provider, her firm is optimistic about more emerging disruptive ventures, active local fund managers, and women-led businesses.
“We look forward to the commencement of the operational set-up of a fund of funds. This blended finance vehicle seeks to unlock US$75million in funding for local capital providers investing in SMEs to advance the Sustainable Development Goals. This milestone comes from the extensive entrepreneurial ecosystem collaboration between venture capital funds, pension funds and other advisors,” she said.
On his part, CEO and co-founder of hapaSpace, Gideon Brefo, urged local innovators to forge collaborations with both domestic and foreign partners, saying: “Otherwise the people in the diaspora will sweep all the opportunities in the ecosystem”.
“There are many donor activities on the horizon. I foresee many ecosystem activities since the people in the diaspora are moving back to do business here,” he added.