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%).

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.

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