African startups cumulatively raised a total of $2.2 billion in 2024 driven by two mega deals by Nigeria’s Moniepoint and South Africa’s Tyme Group.
According to the funding report released by research firm, Africa: The Big Deal, the amount included equity, debt, and grants secured by the continent’s startups.
While the amount raised in 2024 is quite significant, it represents a 25% drop in funding compared to the $2.9 billion raised on the continent in 2023.
Breakdown of the funding
The report shows that a total of 188 ventures raised $1 million or more in 2024, which is about 10% less than what was recorded in 2023.
On the exit front, there were 22 exits made public last year, versus 20 in 2023.
“We realise that the relative counter-performance of 2024 is mostly to be blamed on a slow start of the year: just under $800 million raised in H1, the slowest semester since 2020.
“However, there was a serious rebound in the later part of the year as $1.4 billion was raised in H2 alone (+25% YoY and +80% compared to H1), which made it the second-best semester since the beginning of the ‘funding winter’ in mid-2022.
“The numbers were driven in part – but absolutely not in full – by the two mega deals of Moniepoint and Tyme Group in Q4, minting two new unicorns back-to-back, the first such events since early 2023,” the report stated.
Decline in debt funding
According to the report, one positive takeaway from the 2024 funding was the decline in debt compared with the previous year.
- In 2023, dubbed “The Year of the Debt,” debt funding constituted a substantial 38% of total funding.
- However, this share declined to 30% in 2024, with debt funding contracting by 40% YoY. Total equity raised in 2024 reached $1.5 billion, reflecting an 11% drop from 2023’s $1.7 billion but signaling a recovery after the steep 57% YoY decline in equity funding seen in 2023.
- The research firm noted that this stabilization of equity funding levels is a welcome development, particularly given the challenges faced in 2023, adding that this highlights growing investor confidence and a potential shift toward a more balanced funding landscape.
What you should know
Both Moniepoint and Tyme became the newest African unicorns in 2024 after raising $110 million and $250 million respectively.
- Founded in 2015 by Tosin Eniolorunda and Felix Ike, Moniepoint in October 2024, secured a $110 million investment from multiple investors including Google, bringing its valuation to $1 billion.
- The Series C investment was led by Development Partners International’s African Development Partners (ADP) III fund – a premier fund focused on Africa.
- In December, Patrice Motsepe-backed Tyme Group also raised $250 million in Series D funding round, which brought the fintech’s valuation to $1.5 billion.
- The Series D round was led by Brazil’s Nubank, Latin America’s most valuable financial services company, which contributed $150 million.
