startups funding

Key Takeaways:

  • Eastern Africa’s rise and Northern Africa’s ascent paint a picture of diversifying investment across the continent.
  • Debt financing plays a prominent role, particularly in Eastern Africa.
  • Southern Africa shows resilience with moderate growth, while Western Africa faces readjustment.
  • Central Africa’s positive growth signifies nascent but promising potential.

Despite an overall decline in funding, 2023 witnessed a significant shift in the distribution of startup investment across Africa, with Eastern Africa emerging as the new leader. This article delves into the regional breakdown of startup funding trends and highlights notable developments within each key region.

Eastern Africa Takes the Lead:

Leading the pack, Eastern Africa attracted $880 million in 2023, capturing 31% of all continental startup investment. This rise to the top spot, despite a moderate 29% decline compared to 2022, is noteworthy. Sun King and M-Kopa alone secured nearly half a billion dollars, and debt financing fueled over half of the region’s fundraising. With 130 startups raising $100k or more, Eastern Africa continues to boast a thriving entrepreneurial ecosystem.

Northern Africa’s Ascent:

For the first time, Northern Africa climbed to the second position, attracting $670 million in funding (-39% YoY). MNT-Halan’s massive raise and combined exits of InstaDeep and Expensya ($500m+) would place the region at the top if included. This significant shift indicates growing investor confidence in Northern Africa’s startup potential.

Southern Africa Navigates Stability:

Southern Africa stands out by recording the only positive growth among the four regions, with a modest 6% increase in funding compared to 2022. While no single startup secured over $100 million, regional heavyweights Planet42, TymeBank, and E4 collectively accounted for approximately one-third of the total funding. This suggests a more balanced distribution of investment within the region.

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Western Africa Faces Realignment:

Previously the undisputed leader, Western Africa saw a significant decline, dropping to the fourth position. With “only” $600 million raised (-62% YoY), the region experienced its weakest performance since tracking began. Notably, Western Africa still boasts the highest number of startups raising $100k or more (191, 39% of the continent’s total). This indicates potential for future recovery and continued entrepreneurial activity.

Central Africa Seeds Growth:

While Central Africa remains the smallest player with just 2% of the total funding ($68 million), it saw the highest proportional growth (+33% YoY). This demonstrates a promising upward trajectory for the region’s nascent startup ecosystem.

Source – Africa: The Big Deal.

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Nigel Jr.
As a tech enthusiast and expert, Nigel Jr. is dedicated to providing in-depth and insightful content on all things technology. With a background in online journalism, product reviewing, and tech creation, Nigel has become a trusted source for all things tech.

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