The number of acquisitions in the African tech startup space declined alongside investment in 2024, as for the second year in a row the capital shortage took its toll on M&A activity.
This is according to the 10th edition of the annual African Tech Startups Funding Report released by startup news and research portal Disrupt Africa, which is available free to all as part of an open-sourcing initiative in partnership with Art of Scale.
A total of 200 startups raised a combined total of US$1.1 billion over the course of the year, down by more than 100 per cent on 406 startups and over 50 per cent on US$2.4 billion in 2023. This is the second consecutive year of decline.
The slowdown also had an impact on M&A activity, with the number of such deals falling 20 per cent to 12, having also fallen by 61.5 per cent in 2023. This followed several years of steady growth, as a growing number of exits accompanied the increasing flow of venture capital into the tech space.
Half of the deals that did take place involved South African startups being acquired, while there were two each from Nigeria and Ghana. Deals also took place involving Kenyan and Tunisia startups.
Six of the deals were genuine trade sales, while five were startup-on-startup, and one an investor buyout. This was a welcome change from 2023, when 14 of 15 deals were startup-on-startup. These deals typically involve less capital, or indeed sometimes none at all in the case of share swaps, while in 2023 especially a good number of the deals that took place involved a “startup in distress”. This was less the case in 2024.
Three (20%) of the acquisitions involved mobility startups, with recruitment and HR (2) and fintech (2) the next best-performing in this regard. Whereas in previous years fintech startups have been the most likely to be acquired, accounting for 60 per cent of deals in 2023 and 31 per cent in 2022, this was not the case in 2024.
For more information, or to download the report, please visit disruptafrica.com/funding-report, or email Gabriella on gabriella@disruptafrica.com, or Tom on tom@disruptafrica.com.
About Disrupt Africa
Disrupt Africa is the one-stop-shop for all news, information and commentary pertaining to the continent’s tech startup – and investment – ecosystem. With journalists roaming the continent to find, meet, and interview the most innovative and disruptive tech startups, Disrupt Africa is a true showcase of Africa’s most promising businesses and business ideas. Its research arm releases in-depth reports on various aspects of the African tech startup ecosystem. Details here.
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