A report from ‘Africa: The Big Deal’ has indicated that African startups raised US$ 780 million in H1 2024, a slump of 31% compared to H2 2023 – signalling the unabated crunch in VC funding.
- •Kenyan startups raised US$ 244 million, representing 32% of total funding in H1, with Nigerian startups coming in second with US$ 172 million, representing 23%.
- •Egypt and South African startups emerged third and fourth respectively, representing 13% and 11% of the funding raised in this financial period.
- •While startups from other African countries represented only 21% of the funding, significant improvements were registered by Senegalese and Ugandan startups.
“4 out of 5 dollars invested in startups in Africa went to ventures based in the Big Four. This is high, but not the highest we’ve seen (92% back in H1 2023). A third of all the funding went to Kenya alone,” the report mentions.
Transport and logistics startups did well in H1 by raising 28% of all total funding. This push can be attributed to the boost ‘Moove’ received in March this year from top investors like Uber. Later in June this year, e-mobility startup ‘Spiro’ received almost US$ 50 million from Afreximbank.
“While Fintech came second in amount raised (24%), it stayed in the lead in terms of number of startups raising US$ 1 million or more during the period,” the report enumerates.
About two-thirds of the total funding raised in H1 2024 was equity funding, with debt funding representing the other third. Compared to H1 2023, funding for startups has seen a new low, falling by 57%.
The implications of this phenomenon have been massive, as 2024 has seen former bigwigs like Copia collapse and liquidate assets, with others restructuring operations or seeking mergers.
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