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According to a recent analysis by Africa: The Big Deal, Nigerian startups have taken the lead in securing investments across Africa, amassing $160 million in the first quarter of 2024, despite an ongoing funding slump.
This notable increase marks a significant recovery, given that Nigeria recorded the lowest funding figures in Africa as of January this year. The recent upswing in funding underscores a renewed confidence among investors, highlighted by several large-scale deals during the quarter.
Nigeria was at the forefront of the funding landscape with $160 million, followed by Kenya at $108 million, South Africa at $72 million, and Egypt at $53 million. Collectively, these four nations—often referred to as “The Big Four”—dominated the investment scene, capturing 87% of total startup funding in the region during this period.
However, the overall funding for startups in Africa during the first quarter of 2024 saw a significant decline of 47% year-over-year. Despite this, the levels remain above those seen in 2021 and prior, though they do not reach the record highs of 2022.
A silver lining in the report is the increase in the number of startups that raised at least $1 million during the quarter, a figure that surpasses previous first quarters, with the exception of 2022.
While the total capital raised this quarter was the lowest since Q4 2020, the resilience of African startups is evident as more ventures continue to raise significant funding since the recovery began in Q3 2023.
The analysis observed that while equity investment in Q1 2024 slightly dipped by 9% compared to the last quarter of 2023, debt financing saw a more pronounced decrease of 44%.
The report concludes with a call to investors to fully appreciate the potential within the African tech ecosystem and to provide the necessary backing that will enable startups across the continent to flourish.
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