Tech startups in Nigeria, Kenya and other countries see 57% drop in fundraising

Tech startups in Nigeria, Kenya and other African countries saw a massive 57% drop in fundraising in the first half of 2024.

Funding analysis firm Africa The Big Deal revealed this in a report released on Thursday.

The report revealed that around $780 million will flow into African startups in the first half of 2024.

However, the figure is 57% lower compared to the $1,638 million recorded in the same period in 2023.

The first quarter recorded the highest activity with $466 million raised by startups, followed by $314 million in the second quarter.

Of the $780 million raised by startups during the period, $513 million came from equity investments, while $254 million was raised through debt financing.

The remainder consists of grants and donations.

Kenya alone attracted a third of all financing raised through June, totaling $244 million, followed by Nigeria ($172 million), Egypt ($101 million), and South Africa ($85 million).

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Other economies – Benin ($50 million raised), Ghana ($29 million), Uganda ($19 million), Morocco ($14 million), and Senegal ($11 million) showed promising results during the period.

The report reads: “The key sectors mirrored those in the first quarter: transportation, logistics, fintech, energy, and water. Notable fundraising efforts included $110 million raised by mobility fintech Moove in March, a $51 million loan secured by M-Kopa in May, and $50 million raised by mobility startup Spiro, also in May 2024.

“Two-thirds of this funding is in the form of equity, and one-third is in the form of debt. As for 2023, this is a much higher portion of debt than we have seen before (averaging 17% since 2019).

“4 out of 5 dollars invested in startups in Africa went to companies based in the Big Four. This is high, but not the highest we have ever seen (92% in H1 2023). A third of all funding went to Kenya alone.

“The Transportation and Logistics sector continues to outperform fintech, attracting $218 million. This represents 28 percent of total H1 2024 funding. This is supported by two of the three largest deals announced in H1 (Moove and Spiro) falling within the sector.

“Fintech attracted $186 million, representing 24 percent of the total, while Energy and Water raised $132 million, representing 17 percent of the total. While fintech was second in terms of the amount raised, the sector still led the way in terms of the number of startups raising $1 million or more during the period.”

By: Babajide Okeowo

Tech startups in Nigeria, Kenya and more see 57% drop in fundraising first appeared on Latest Nigeria News | Top Stories from Ripples Nigeria.