Nigeria has been the best-funded country in Africa, from a tech startup perspective, for the last two years, but it suffered a sharp fall from grace in 2023.
According to the ninth edition of the African Tech Startups Funding Report, released last month 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.
After bucking global trends in a record-breaking 2022, African tech saw a reset of sorts in 2023, as the global capital shortage began to bite. The number of funded ventures, and the total funding raised, declined for the first time since 2016, though not as dramatically as many had feared.
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.
Though Nigeria still saw more startups raise funding than any other country, with 124, its total secured funding of US$399,909,000 actually pushed it back into fourth position, behind Kenya, Egypt and South Africa.
As for the other “big four” markets, all saw fewer startups secure capital, but it was a mixed bag when it came to total funding. Egypt joined Nigeria in witnessing a decline, albeit to a much lesser extent, but Kenya and South Africa actually saw an increase in total investment, with the caveat in the Kenyan case that this was primarily due to big rounds for two energy companies.
Stronger than expected performances in Kenya and South Africa, then, actually meant the share of investment secured by the four leading markets increased. The US$2,176,274,000 raised by those four countries accounted for 90.4% of the US$2,406,914,000 total, compared to an 80.8 per cent share in 2022. The share of funded startups, however, did decline, to 71.9 per cent from 75.8 per cent.
Startups raised funding in 26 African countries, down from 27 in 2022, and though there were some surprisingly strong performers, like Morocco and Rwanda, the general story is one of declining investment in the face of the “funding winter”.
