Finance

African start-up funding slips 36% in 2023, yet 'Big Four' nations shine bright

Monday, 08 January 2024 15:54
African start-up funding slips 36% in 2023, yet 'Big Four' nations shine bright

(Ecofin Agency) - Kenya, South Africa, Egypt, and Nigeria collectively absorbed nearly 75% of the total funding raised by African startups in 2023, with fintech companies accounting for the lion’s share.

African startups experienced a 36% decline in fundraising in 2023, according to data released on January 3 by the digital economy consulting firm TechCabal Insights. The total funds raised amounted to $3.2 billion, down from the $5 billion recorded in 2022, marking the lowest figure since 2020 ($2.1 billion), the consulting firm noted.

Over the past year, the amount raised by startups on the continent fell each quarter, starting at $1.2 billion in the first quarter, dropping to $877.8 million in the following quarter, and falling again to $492.7 million in the third quarter. Only the fourth quarter saw a slight increase, with fundraising of $551.2 million.

The distribution by sub-region shows that North Africa captured the largest share with 33.67% of the total funds raised, followed by East Africa (26.22%), Southern Africa (19.94%), West Africa (17.89%), and Central Africa (1.92%).

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As in previous years, four countries (Kenya, South Africa, Egypt, and Nigeria) accounted for the lion's share of fundraising. Dubbed the "Big Four", they accounted for 74.9% of the total amount raised by all countries on the continent.

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By sector, fintech start-ups remain the best-funded nuggets in Africa, accounting for 45% of total financing raised last year.





 
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ECOFIN AGENCY offers a selection of articles translated from AGENCE ECOFIN. Founded in 2011, Agence Ecofin is a leader in Francophone Pan-African economic news, particularly in West and Central Africa. The agency publishes daily news on nine African economic sectors: Public Management, Finance, ICT, Agribusiness, Energy, Mining, Transport & Logistics, Communication, and Training.

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