Nigeria has emerged as the top country for venture capital investments in Africa in 2022, according to a report by the Africa Private Equity and Venture Capital Association (AVCA).

The report, titled “2022 AVCA Venture Capital in Africa Report,” revealed that Nigeria accounted for 22% of venture capital investments in Africa, outperforming other countries on the list. West Africa maintained the top spot for the second consecutive year, with Nigeria being the most active country in the region and on the continent.

The region attracted the largest proportion of venture capital deal volume in Africa at 30%, with Nigeria accounting for 22% of the volume.

The financials sector was the most concentrated area for deal-making, accounting for 31% of deal volume and 42% of deal value. The report found that 77% of investors active in Africa’s venture landscape in 2022 were international investors, while 23% were African investors.

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In 2022, Africa raised $5.2 billion in venture capital across 786 deals, representing 3% of the total volume and 1.2% of the total value of global venture funding. When venture debt is included, venture inflows to Africa rose to $6.5 billion raised across 853 deals.

The report also revealed that startups raising their first round of venture financing accounted for only 37% of VC deal volume in 2022, while startups with a gender-diverse founding team raised close to $950 million.

The report noted that although the volume and value of venture capital in Africa is relatively small compared to other regions such as North America and Asia, it has been growing steadily in recent years and shows potential for further growth in the future.

Unlike the global venture market, which experienced significant contractions in startup funding to varying degrees in different regions, Africa’s venture ecosystem remained relatively stable and only experienced a funding drop of less than $50 million compared to 2021.

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Latin America saw the biggest year-on-year decline in startup funding at 59%, followed by Asia at 35%. As a result, the funding gap between Africa’s closest socio-economic comparator, Latin America, decreased from $14.8 billion in 2021 to $3.1 billion in 2022.