African tech startups raised US$492,418,000 in Q3 2023, taking the total for the first nine months of the year to US$1.4 billion, down 48 per cent on the corresponding period in 2022 as the global capital crunch continues to impact the continent’s startup sector.
According to the most recent edition of the annual African Tech Startups Funding Report released by Disrupt Africa, available free in partnership with Flat6Labs, MarketForce, 4Di Capital, Mercy Corps Ventures, Newtown Partners, and InsiderPR, 633 African tech startups raised a combined US$3,333,071,000 in 2022.
This represented incredible growth. The number of funded startups increased by 12.2 per cent on 564 in 2021, while the total secured funding jumped 55.1 per cent on US$2,148,517,500 in 2021.
This year is set to be a regressive one, however, in line with global trends in investment – what is becoming known as the “reset” after tremendous growth that went before. Only 186 ventures have secured investment so far this year, with a total of US$1.4 billion raised. This figure is down 48 per cent on the US$2.7 billion raised in the first nine months of 2022.
Of even more concern is the fact that quarterly totals are slowly declining. African tech startups raised US$649,303,000 in Q1, down 57.2 per cent on Q1 2022. In Q2, they raised just over US$540 million, bringing up an H1 total of US$1.19 billion, down 54.2 per cent on US$2.275 billion in H1 of 2022. The US$492,418,000 raised in Q3 of this year makes it the worst quarter of the year from a funding perspective.
Last year’s first three quarters of the year ended up accounting for over 80 per cent of total investment for the whole of 2022, so if the current trajectory holds then year-on-year funding in the African tech startup space looks set to decline by around 54 per cent.
If you are interested in sponsoring the next edition of the African Tech Startups Funding Report, due for release in January 2024, you can find all the relevant information here.
