INTERVIEW: Blockchain Contributed 5.3% of Africa’s Venture Funding in 2025. Why Are Investors Betting on the Continent? 

In this interview with Impact Newswire, Jarryd Kennedy, CV VC Head of Investments Africa, discusses the fifth edition of the CV VC African Blockchain Report and examines how blockchain is evolving from an experimental technology into a critical component of Africa’s digital infrastructure. Kennedy discusses why African startups are increasingly applying blockchain to solve practical economic challenges, including cross-border payments, financial services, identity verification, artificial intelligence coordination and data authentication. He explains how the continent’s experience with mobile money has created a foundation for the next wave of digital innovation, why investors are increasingly backing startups with ambitions beyond single-country markets, and how regulatory progress and institutional adoption are shaping the future of Africa’s blockchain ecosystem. 

Africa’s blockchain sector is entering a new phase of growth, with the technology accounting for 5.3% of all venture funding raised on the continent in 2025, nearly double the global share of 3%, according to the fifth edition of the 2025 CV VC African Blockchain Report, published this week in partnership with Absa Group.

The report shows that blockchain is becoming an outlier within Africa’s venture ecosystem, with startups using the technology to address practical challenges across financial services, payments, identity verification, fraud prevention, artificial intelligence coordination and data authentication.

While African blockchain startups raised $90.1 million across 28 deals in 2025, total funding declined by 26.6% year-on-year amid tighter global venture conditions. However, the continent’s share of global blockchain deal activity increased to a record 2.8%, highlighting continued early-stage innovation. Seed-stage companies accounted for nearly half of disclosed funding, demonstrating sustained entrepreneurial activity despite a more challenging investment environment.

“Africa is not an emerging blockchain market. It is an arriving one,” said Mathias Ruch, founder and CEO of CV VC. “While global capital is consolidating around fewer, larger bets, Africa is widening the innovation frontier, integrating blockchain into essential economic infrastructure because necessity and foresight are driving its effective use.”

Source: CV VC 2025 African Blockchain Report

The report identifies financial infrastructure as the dominant application area for blockchain in Africa. Centralised blockchain services attracted 67.9% of all blockchain capital deployed on the continent, driven by demand for stablecoin-powered payments, digital asset banking infrastructure, tokenised real-world assets, cross-border settlement systems and blockchain-enabled credit solutions.

Geographically, Pan-African startups attracted the largest share of funding at 57.2%, followed by South Africa at 21.1% and Nigeria at 13.5%. Other active markets included Egypt, Kenya, Ghana and Rwanda, reflecting a broadening blockchain ecosystem beyond traditional technology hubs.

Source: CV VC 2025 African Blockchain Report

Regulation is also evolving rapidly. Fifteen African countries now have formal digital asset regulatory frameworks, more than doubling from seven countries a year earlier. The shift reflects growing efforts by governments and financial institutions to establish clearer licensing requirements, consumer protections and compliance standards that can support institutional adoption.

“The African Blockchain Report is fast becoming the future ticker for the utility of blockchain technology across the continent,” said Rob Downes, Head of Digital Assets at Absa Corporate and Investment Banking. “Institutions want secure, regulated infrastructure that allows digital assets to sit alongside traditional assets within the same trusted banking environment.”

The report also highlights blockchain’s growing intersection with artificial intelligence, where the technology can provide verification, transparency and coordination layers as AI systems become increasingly embedded in economic and public systems.

For investors, the findings point to a significant opportunity. Despite Africa securing only $1.7 billion of global venture capital across all sectors in 2025, representing 0.33% of worldwide funding, the continent’s youthful population, digital adoption and history of technological leapfrogging continue to create opportunities for frontier technologies.

Editor Faustine Ngila spoke with Jarryd Kennedy, CV VC Head of Investments Africa. Here is the full interview, edited for clarity:

1. The report shows blockchain accounted for 5.3% of all venture funding in Africa in 2025, compared with about 3% globally. What is driving this stronger relative growth in Africa, and what indicators show  that blockchain is moving from experimentation into mainstream venture investment?

Technology market fit is the core driving force. Africa is integrating blockchain into critical infrastructure out of structural necessity. Early stage ventures are already demonstrating strong commercial traction. More tellingly, established fintechs and technology startups that have already validated their commercial propositions are now embedding blockchain into their core operations. That is the clearest signal that this has moved beyond experimentation into mainstream venture investment.

2. Africa has attracted increasing blockchain investment, but what types of companies are receiving funding, and which areas show the strongest long-term potential?

I think an interesting finding this year is that Africa’s share of global blockchain deal activity climbed to a record 2.8%, signalling sustained early-stage innovation. Seed rounds accounted for nearly half of all disclosed funding, reflecting continued entrepreneurial momentum at the early stage despite tighter capital conditions. 

In  terms of long-term potential, three themes stand out. Value transfer is the most established, where stablecoins and blockchain-based payment products have revolutionised cross-border payments. This is now evolving into a broader suite of on-chain financial primitives across saving, spending, borrowing, and lending, pointing towards a world of fully programmable money. Tokenization is bringing real-world assets on-chain across multiple asset classes, creating a more democratic and accessible model for capital formation. The benefits are compelling: low costs, minimal friction, instant settlement, and 24/7 trading availability.

AI  is the most topical theme. Blockchain is being applied to track and validate data ownership and to give AI agents the ability to transact natively in a digital-first world. Critically, most AI models are trained on developed-world data and lack understanding of African languages, cultures, and nuances. There is a growing movement to build localised African AI solutions, and blockchain plays a central role in tracking and tracing that data value chain from creation to application.

These three themes are being deployed across multiple sectors including financial services, education, agriculture, identity, regulatory compliance, and media. The breadth of application is itself a signal of how foundational this technology is becoming.

3. Pan-African startups secured 57.2% of total blockchain funding, ahead of South Africa and Nigeria. What explains the rise of cross-border African startups, and does this suggest investors are looking beyond individual national markets?

Source: CV VC 2025 African Blockchain Report

South Africa and Nigeria remain key hubs with a strong concentration of startup and economic activity. What is shifting is the ambition of the startups themselves. Founders are deliberately evolving from single-market enterprises into multi-market businesses, and that expansion is a critical input for later-stage investors. A business operating across borders offers diversified revenue streams, reduced concentration risk, and a more mature investment proposition. Investors are responding to that.

4. The report says 15 African countries now have formal digital asset regulatory frameworks, up from seven a year earlier. How important is regulatory clarity in unlocking institutional investment?

It is paramount. The markets that become most attractive are those combining a buoyant, sizable economy with a regulatory environment that actively promotes innovation rather than stifling it. That combination is what draws institutional capital.

Source: CV VC 2025 African Blockchain Report

5. How does Africa’s blockchain funding landscape compare with regions such as North America, Europe and Asia? Is Africa competing for global capital?

Africa competes for global capital and is holding its own. While the US remains the dominant blockchain market, Africa’s deal activity proved materially more resilient than the global market, where deal count fell by close to a third.

The reason is straightforward. Blockchain has the potential to solve large structural infrastructure problems on the continent. Existing solutions set a low bar, the opportunity gap is significant, and the potential upside for early stage investors is exceptionally large. Critically, the infrastructure landscape offers far more space to build and capture markets with new solutions than in more developed regions where incumbents are deeply entrenched. Africa’s macro fundamentals only strengthen that case, and the continent’s demographic profile points to powerful long-term growth.

6. Critics argue that much of blockchain investment globally has focused on speculation rather than practical applications. What evidence is there that African blockchain startups are solving real economic or social challenges?

African blockchain applications are unequivocally practical. Entrepreneurs have recognised blockchain as a powerful infrastructure layer and are building solutions to real-world problems. Use cases span value transfer, big data, artificial intelligence, and tokenization. This is utility-driven innovation addressing structural challenges that have long been a significant cost on African economies.

7. With Absa Group partnering on the report, what role do traditional financial institutions have in Africa’s blockchain ecosystem?

Traditional financial institutions have recognised blockchain as a validated and powerful infrastructure layer. Banks are now active adopters, strategic partners, and infrastructure providers. The involvement of institutions like Absa signals a decisive shift. They are firmly bullish on blockchain’s ability to reshape financial services, and that confidence is accelerating its adoption across the sector.

8. Despite rising investment and regulatory progress, what are the biggest risks facing Africa’s blockchain sector, and what needs to happen for the continent to become a global blockchain hub?

Africa is already a global blockchain hub. The technology has demonstrated superb market fit for the continent’s challenges. As with any early-stage sector, risks exist including regulatory uncertainty, liquidity constraints, talent gaps, and emerging market volatility, but the fundamentals are strong and the trajectory is clear.

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