The “funding winter” afflicting African tech startups, as well as those across the rest of the world, shows no sign of abating as Q1 funding fell by more than 50 per cent to US$310 million from US$650 million in the corresponding quarter last year.
According to the ninth edition of the African Tech Startups Funding Report, released in January by Disrupt Africa in partnership with Flourish Ventures, AAIC Investment, and Atlantica Ventures, a total of 406 startups raised a combined total of US$2.4 billion over the course of 2023.
These figures meant African tech saw a reset of sorts, as the global capital shortage began to bite. The number of funded ventures was down 35.9 per cent on the 633 that raised in 2022, while the combined total of US$2.4 billion was down 27.8 per cent on the US$3.33 billion raised in 2022.
Any hopes that 2024 would see an uptick in investment have been dashed by a disappointing Q1, with funding totalling just US$310 million in the first three months of the year, down 52.3 per cent on the US$650 million raised by startups in the corresponding period of 2023. Indeed, the rate of decline remained fairly similar, with Q1 2023 funding having been down 57.2 per cent on Q1 2022.
The number of funded ventures marginally fell in Q1 2024 as opposed to Q1 2023, to 82 from 87. A total of 175 startups raised funding in Q1 2022, so at least the rate of decline in this regard is slowing. Yet is funding levels remain at the same level, then 2024 looks set to eclipse 2023 when it comes to falling funding for African tech ventures.
