Nigerian startups received the largest chunk of funds raised by African startups over the last five years, accounting for 29% of the $15 billion total investments.
This was revealed in the latest report by research firm, ‘Africa: The Big Deal’, which analyses funding received by the continent’s startups. According to the report, Nigerian startups received $4.4 billion out of the $15 billion that came into Africa between 2019 and 2023.
The report revealed that Nigeria led the Big Four in terms of the African startup ecosystem, comprising Kenya, South Africa, and Egypt. The four countries attracted 84% of all the start-up funding in Africa since 2019 per The Big Deal report.
It added that the Big Four is also home to more than three quarters (25% for Nigeria) of all ventures having raised $1 million or more during the period. South Africa came slightly ahead of Kenya in terms of $1 million plus start-ups.
Other leading markets
The report shows that the two closest runner-ups to the Big Four are Senegal and Ghana, though they have claimed almost 6 times less funding than Egypt since 2019.
“While they might be neck and neck in absolute terms, Ghana’s position feels stronger than Senegal’s as a potential Big Five contender in the long run, with nearly 3 times as many start-ups having raised $1m+, including 13 that have crossed the $10m mark in funding over the period, versus ‘only’ four in Senegal where 76% of all the start-up funding since 2019 has gone to Wave alone,” it added.
The Big Deal said most of the other markets where startups have raised over $100 million since 2019, except the Democratic Republic of Congo (DRC) are located in East (Tanzania, Uganda), and North Africa (Algeria, Tunisia, Morocco).
“In the latter, there are, however, strong discrepancies between the three markets: in Algeria only a couple of startups have disclosed funding over $1m in the period, with Yassir alone claiming 98% of the total amount.
“Tunisia is home to a dozen ventures that raised $1m+ but more than two-thirds of the capital has gone to InstaDeep. Morocco, however, shows a much more balanced picture with close to 40 ventures having raised $1m or more since 2019,” the report stated.
The report noted that beyond those, 12 countries have attracted between $10 million and $100 million in the past five years, and an additional 11 have seen some level of activity, sometimes very limited. It, however, indicated that 19 markets in Africa have not registered any deal at all.
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Meanwhile funding for African startups has continued to decline as investors are cautiously weighing their options in the face of economic uncertainties around the world.
In the first quarter of 2024, funding for African tech startups dropped by more than 45% to $466 million, which is a 9% quarter-on-quarter decline and a 47% year-on-year decline. This is a 51.36% decline from the previous year, when startups raised at least $369 million across 64 publicly announced deals.
Funding in the first quarter was led by Nigerian mobility startup, Moove, which landed $110 million in the quarter.