African startups raised more than US$600 million in the period between July and September, outpacing the last two quarters of the year – according to a study by Africa: The Big Deal.
- The funds – which comprised of debt, equity, grants, and exits – mostly went to fintechs accounting for 57% and energy-tech raking in 31%.
- Equity funding still led in Q3 with over US$400 million (62%) followed by debt funding which accounted for 35%.
- The last quarter’s most funded startups included d.light’s multi-currency facility worth US$176 million and MNT-Halan’s raise worth US$157.5 million.
“In 2024 so far, start-ups in Africa have raised around $920m in equity, which is the equity funding they had raised in the whole of 2020, but far behind 2021 and 2022 levels, and also not quite at the level of the first three quarters of 2023,” Africa: The Big Deal reported.
“That said, debt numbers are most likely still underestimated as start-ups don’t always publicise the ‘split’ between equity and debt when announcing a round,” the study added.
About 44 startups in Africa raised more than US$1 million in Q3. The period also saw startups like Nala, FlapKap, Fido, valU and Paymob raise more than US$20 million in their respective rounds. Climate tech funding has also seen a steady growth during the quarter under review.
The improvement from the preceding quarter could indicate that the ecosystem is warming up again. As Central Banks globally lower interest rates and encourage lenders to ease borrowing, startup funding may see a resurgence.
Compared to other periods in the last four years, however, funding remains at a 38% low. The positive development all through the year despite this crunch is the minimal slump in the number of startups raising more than US$1 million, with data revealing it is at -6% Year-On-Year growth.
