Research shows that only four countries scooped 87 percent of all startup capital in 2023. You guessed right: Kenya, South Africa, Nigeria and Egypt dominated their regions in fundraising.
Africa: The Big Deal which tracks funding raised by startups in Africa showed that the amount raised by firms in the ‘Big Four’ was also way higher since 2019.
Businesses in Kenya scooped about $800 million, an equivalent of 91 percent of all funding in the Eastern Africa region, leaving only 9 percent of cash for the rest of the countries. The capital raised also equalled 28 percent of all the money invested in the continent, buttressing Kenya’s salient position in the startup economy in the world.
In the Northern Africa region, startups in Egypt raised $640 million to take second place behind the East African innovation giant on the continent. The Egyptian firms however totally dominated their region scooping 95 percent of all the cash and equity on the table.
South Africa dominated the southern region by scooping 97 percent of all available venture capital, but was still way behind Kenya and Egypt on the continent.
Startups in Nigeria completed the top four as expected by raising $410 million.
Startup Funding Share in Africa 2023
Apart from South Africa which increased the amount of money raised over the years between 2022 – 2023 by 8 percent, the rest of the Big Four saw their shares shrink by different margins.
Nigeria saw the biggest beating, raising three times less compared to when businesses in the country scooped a whopping $1.2 billion in 2022.
EV battery manufacturer Ampersand which operates majorly n Kigali and has a presence in Nairobi was among the firms that managed to raise funds at the end of last year.
Despite dominating the venture capital markets like never before, the cash crunch for new investment is evident as the total amount raised in 2023 is just about $2.45 billion compared to $3.65 billion in 2022 and $3.53 billion in 2021.
The good news however is that about 40 percent of consistent investors are headquartered on the continent. The Big Deal analysts found that there are 200 ‘resolute investors’ who have been consistently investing in African startups since 2021.
There were also more than 619 ‘unique investors’ involved with at least a deal of $100k and above, representing a 38 percent drop YoY.
“Africa also continued to be attractive to newcomers: almost half of the investors who invested in a start-up in Africa in 2023 had not invested on the continent in either 2022 or 2021. In 2023, we recorded 619+ unique investors in Africa involved in at least a deal $100k & above. This represents a -38% YoY drop. Only 29% of them were involved in more than one deal.
And of those who invested in both 2022 and 2023, almost half (47%) reduced their deal activity, while 36% signed the same number of deals.
~ Max Cuvellier Giacomelli , Africa: The Big Deal
