- Kenya took the number one spot as the venture capital recipient, while Egypt, South Africa and Nigeria came 2nd, 3rd and 4th, respectively.
- Fintech led in attracting funding, accounting for about 45% of the total funding, though energy-led startups are increasingly gaining traction.
Kenyan startups attracted $800 million (Sh127.2bn) in venture capital in 2023, surpassing Egypt, Nigeria and South Africa to top the continent. A new report by Africa: The Big Deal, a platform for startup funding, shows capital injection in Kenya accounted for 28 per cent of all funds raised on the continent. Egypt came second with $640m (Sh101.8bn), followed by South Africa with $600m (Sh95.4bn) and Nigeria with $410m (Sh65.2bn).
In East Africa, Kenya’s share grew from 86 per cent in 2022 to 91 per cent in 2023, stamping its dominance in the region. The report shows that startups that raised $100,000 (Sh16m) and above in the country stood at 93. The report reads in part, “If we look at things from a regional point of view, 2023 has seen a rebalancing of startup investments across the continent. While Eastern Africa comes out on top, the four key regions have attracted comparable funding last year.”
With nearly half a billion dollars raised by Sun King and M-Kopa alone, Eastern Africa attracted $880 million (Sh139.9bn) in 2023, representing 31 per cent of all the startup investments on the continent. It, therefore, took the number one spot up from position two in 2022 and four in 2021. Debt represented more than half (56 per cent) of the funding raised in the region, and overall, 130 startups raised $100,000 or more during the period.
Fintech led in attracting funding, accounting for about 45 per cent of the total funding. But energy-led startups are increasingly gaining traction. For the first time, Northern Africa was the second-most attractive region on the continent as startups recorded a 39 per cent decline year-on-year to $670m (Sh106 billion). Southern Africa emerged as the only region among the four primary regions to register a moderate yet positive growth of six per cent year-on-year.
None of the startups in the region secured funding exceeding $100 million, with the top three fundraisers —Planet42, TymeBank, and E4—accounting for only approximately one-third of the total regional financing, in contrast to 57 per cent in Eastern Africa and 86 per cent in Northern Africa. The percentage was even less in Western Africa at 23 per cent, yet it boasted the highest number of ventures securing $100,000 or more (191, constituting 39 per cent of the continent’s overall total).
Despite raising just over $600 million in funding, which is 2.6 times less than in 2022, the region fell from the top spot to fourth. This marks a significant decline in performance since 2019 when the platform began monitoring deals. While being the only region to record a 33 per cent year-on-year growth from $51m in 2022 to $68m in 2023, Central Africa continues to represent a fraction of the total funding (2 per cent). 2023 marked the lowest funding for African startups since 2020’s $2.1 billion (Sh332bn). It’s a 36 per cent decline from 2022’s $5 billion (791bn) total.