A recent report by Africa: The Big Deal, a leading insights company focusing on African tech startups, reveals a significant development in the continent’s entrepreneurial ecosystem.
According to the report, African tech startups collectively raised a commendable $466 million in the first quarter of 2024.
While this figure underscores substantial financial activity, it reflects a 47% decrease compared to the nearly $900 million raised during the same period in 2023.
Despite the overall decline in total funding, a noteworthy trend emerges: more African tech startups garnered investments exceeding $1 million in Q1 2024 than in the corresponding period of the previous year.
The report further dissects the funding landscape, revealing that 121 African tech startups collectively attracted the aforementioned funding.
These startups secured investments ranging from $100,000 or more.
Equity funding dominated the financing scene, accounting for a lion’s share of $332 million, constituting 71% of the total funding.
However, this represents a 9% quarter-on-quarter decline and a significant 47% decline compared to the previous year.
Conversely, debt financing amounted to $132 million, comprising 28% of the total funding. This reflects a 44% quarter-on-quarter decline and a 46% year-on-year decrease.
Nigeria’s Moove leads the pack with 24% of African tech startups’ total funding
Moove, a Nigerian mobility startup, emerged as the frontrunner in fundraising endeavors, capturing 24% of the total funding for African tech startups in Q1 2024.
The company secured a substantial $100 million in equity funding, spearheaded by Uber, and an additional $10 million in debt financing led by Stride Ventures.
This funding round, which propels Moove closer to unicorn status with a valuation of $750 million, garnered support from prominent investors, including the sovereign wealth fund Mubadala, The Latest Ventures, AfricInvest, Palm Drive Capital, Triatlum Advisors, and Future Africa.
Following Moove’s trail, Kenyan transport and logistics startup Roam secured $24 million in funding, comprising $14 million in equity and $10 million in debt financing.
Additionally, Kenyan health technology firm HewaTele attracted $20 million in funding, equally distributed between equity and debt.
Geographically, Nigerian startups dominated the funding landscape, amassing $160 million, representing an impressive 35% of the total funding.
Kenya followed suit with $108 million, capturing 24% of the total, while South Africa and Egypt secured $72 million (16%) and $53 million (12%), respectively.
Collectively, these “Big Four” African tech startup ecosystems accounted for 87% of the total funding.
Regional Insights: Funding Distribution Across African Nations
Notable contributions also came from other African countries, with Uganda attracting $16 million, Ghana $10 million, Tanzania $9 million, and Morocco $7 million in funding.
The transportation and logistics sector emerged as the most lucrative, attracting 32% of the total funding, followed closely by fintech with 23%.
Meanwhile, agritech, food, and the energy sector each garnered 11% of the total funding.
Surprisingly, health tech received the least, capturing only 10% of the total.
Despite efforts to promote gender diversity, male-led tech startups continued to dominate the funding landscape, with 99% of investments allocated to startups led by at least one male founder.
Startups with at least one female founder received a mere 15% of the total funding, highlighting the ongoing challenges in achieving gender parity within the tech startup ecosystem.
