For the second year in a row, startups in Kenya received the bulk of funding in 2024, 88 percent of the total raised in East Africa and more than a quarter of the continent’s total, according to a new report by Africa: The Big Deal.
- According to the data, Kenyan startups raised US$638 million in 2024 towering over Nigerian startups, which raised US$410 million.
- Egyptian startups emerged third with US$400 million raised and South African startups came fourth with US$394 million.
- The ‘Big Four’ garnered 84% of all start-up funding in Africa, retaining their dominance in their respective regions since 2019.
The entire continent raised US$2.2 billion in 2024, which was 25% less than the amount startups raised in 2023. This was largely due to the financial crunch prevalent in the first half of 2024 as many countries globally tried to claw back to macroeconomic stability.
“Another reason to remain positive is that the YoY decline in funding is mostly attributable to a decline in debt funding. You may remember we’d dubbed 2023 ‘The Year of the Debt’, and while the share of debt in the overall funding announced remained high in 2024 (30%), it was not as high as it was in 2023 (38%),” the report explained.
In 2023, Kenyan startups raised almost US$800 million representing 28% of the total continental pie. Nigeria, which lost its startups dominance in 2023 to Kenya, has stagnated at the US$400 million neighborhood.
“East Africa attracted the most funding for the second year in a row: $725m in total (-18% YoY), i.e. 1 in 3 dollars raised on the continent in 2024. Kenya alone ($638m) made up 88% of the total raised in the region, and 29% of all the money raised on the continent,” the report said.
Most of the startups that received the bulk of the funding in Kenya were climate-tech. These include BasiGo, d.light, and SunCulture. For instance, in July last year, d.light secured US$176 million to expand access to solar energy. SunCulture raised US$12 million in April during their Series B round.
Tanzanian startups raised US$53 million, emerging second in the region while Uganda came third after its startups raised a collective of US$19 million in 2024. Continentally, they were number 7 and 11 respectively. With the launch of innovation sandboxes last year, Tanzania intends to ramp up its attraction to startup founders and ecosystem builders.
The Funding Drought Continues
West Africa was acclaimed as a more balanced region with more countries raising over US$10 million. While Nigeria led the region, startups from other countries like Ghana (US$68 million), Benin (US$50 million), Côte d’Ivoire (US$33 million), and Senegal (US$22 million), showed considerable achievements.
“In Northern Africa though, funding ($478m, 22%) fell by -35% between 2023 and 2024, mostly due to a -37% YoY contraction in funding (the most acute of the Big Four) in Egypt, which represented 84% of all the funding raised in the region last year. While Morocco ($70m, #5) held up relatively well, it wasn’t enough to make up for it,” the report added.
The Southern Africa region also witnessed a slump in funding for startups in 2024 compared to 2023 (-36% YoY). South Africa, the most active spot in the region, saw its startups’ funding decline 34% YoY. The region also roused concerns for the startup ecosystem as 99% of all funding was concentrated in South Africa.
The Central African region remains nascent in the startup ecosystem, gaining about US$5 million in total deals in the region. This was ten times lower than in 2023.
