A single raise by Nigerian fintech, Waza, gave the country a 14% share of total funds raised by African startups in August, which stood at $56 million.
This is according to the latest report by research firm, ‘Africa: The Big Deal’, which tracks fundraising across the continent.
Waza, a Y Combinator-backed B2B payment and liquidity provider for emerging market businesses, in August, secured $8 million in equity and debt funding, which consists of a $3 million seed equity round and a $5 million in debt funding.
This became one of the three largest deals sealed by African startups in the month according to the funding report. The other two top deals include Dutch DFI FMO’s $10 million investment into Ghanaian Fintech Fido as part of its Series B round; and Solarise Africa’s $9 million announcement.
Second-slowest month in four years
From a $443 million record in July, the $56 million raised by African startups in August represents an 87% decline in funding month-on-month.
- Africa: The Big Deal pointed out that this made August 2024 the second-slowest month in four years in terms of funding raised, after June 2024 when $42 million was raised.
- The report also shows that the majority of funding raised in August was raised as equity, which represents 87%, while the remaining was 9% debt and 4% grants.
- According to the report, a total of 27 start-ups announced they had funding in August, which was well below the monthly average over the past twelve months of over 40. No exits were recorded last month.
July record
As the startup funding drought continues globally, it may be difficult for African startups to surpass the July record of $443 million in the remaining months of this year.
While noting that the fund raised in July 2024 was not only the highest this year, but also in the last 14 months, the report from Africa: The Big Deal indicated that it was also more than what was raised in the whole of Q2 2024, and 2.5 times the average monthly amount raised over the past 12 months.
The July record also ensured that African startups crossed the $1 billion mark, indicating a remarkable improvement amid funding winter.
However, this year has not been looking good for Nigerian startups in terms of fundraising. Just as the country recorded only one fundraising in August, in July, Intrion Health’s $1.6 million pre-seed round was the only major funding by a Nigerian startup that made the news.
What you should know
- Nigeria, which was for years the leading destination for startups funding in Africa lost its top position to Kenya in 2023, with Kenyan startups attracting approximately $800 million, the largest amount in the continent, while Nigerian startups secured $410 million.
- In the first half of 2024, African startups secured $780 million in funding. Out of that $780 million Kenyan startups garnered the largest amount, $244 million, representing 32% of the total funding raised, while Nigeria received approximately $172 million. Egypt took a share of $101 million, and South Africa secured $85 million.
- Meanwhile, data from Africa: The Big Deal also shows that over the last five years, from 2019 to 2023, Nigerian startups received the largest portion of funds raised by African startups, accounting for 29% of the $15 billion total investments.