Tech start-ups in Nigeria, Kenya, and other African countries suffered a massive 57% decline in fundraising in the first half of 2024.

A funding analytics company, Africa The Big Deal, disclosed this in a report released on Thursday.

The report revealed that approximately $780 million flowed into African start-ups in the first half of 2024.

However, the figure was 57% lower than the $1.638 million recorded in the same period in 2023.

The first quarter saw the highest activity with $466 million raised by the start-ups followed by $314 million in the second quarter.

Of the $780 million raised by the start-ups during the period, $513 million came from equity investments, while $254 million was raised through debt financing.

The remaining amount consisted of grants and donations.

Kenya alone attracted one-third of all financing raised by June, totaling $244 million, followed by Nigeria ($172 million), Egypt ($101 million), and South Africa ($85 million).

Other economies – Benin ($50 million raised), Ghana ($29 million), Uganda ($19 million), Morocco ($14 million), and Senegal ($11 million) showed promising results during the period.

The report read: “Key sectors mirrored those of the first quarter: transportation, logistics, fintech, energy, and water. Notable fundraising efforts included $110 million raised by mobility fintech Moove in March, $51 million in loans secured by M-Kopa in May, and $50 million raised by mobility startup Spiro, also in May 2024.

“Two-thirds of this funding was in the form of equity, and a third was debt. As for 2023, this is a much higher share of debt than what we’d been seeing in the past (17% on average since 2019).

“4 out of 5 dollars invested in start-ups in Africa went to ventures based in the Big Four. This is high, but not the highest we’ve seen (92% back in H1 2023). A third of all the funding went to Kenya alone.

“The Transport and Logistics sector has continued to edge financial technology, attracting $218 million. This represents an outstanding 28 percent of the total H1 2024 funding. This was bolstered by two of the three largest deals announced in H1 (Moove and Spiro) belonging in that space.

“The Fintech sector attracted $186 million representing 24 percent of the total while Energy and Water raised $132 million representing 17 percent of the total. Though fintech came only second in the amount raised, it stayed in the lead in terms of the number of start-ups raising $1 million or more during the period.”

By: Babajide Okeowo

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