The African start-up scene has grown in the last decade and is now a vibrant ecosystem. Despite funding challenges experienced in 2023, the preceding 4 years were characterized by strong funding. As usual, Kenya in the East, South Africa in the South, northern African Egypt and Nigeria in West Africa make up the big four.
Nigeria, specifically, has received over one-third of total funding since 2019, totalling $4.2 billion. Western Africa as a region raised the most amount with $5.1 billion. This means Nigeria took about 82.35% of all the region’s funding. This is no surprise as the country is home to start-ups such as Flutterwave, Jumia and Paystack. Fintech start-ups are the most funded in Africa. In recent years, Nigeria has overtaken South Africa as the leading fintech market. Further, funding in this space led to West Africa growing into a global leader in Mobile money. The region’s global share of registered mobile money accounts has risen from 11% in 2021 to 33% in 2022.
In terms of overall funding, Eastern Africa is second. The region raised a total of US$ 3 billion. With US$ 2.5 billion, Kenya secured 83.3 % of all funding received. Of the US$ 2.5 billion Northern African states received, US$ 2.1 was for start-ups based in Egypt. Finally, South Africa received US$ 2.2 billion. This is almost 100% of the US$ 2.3 billion the southern region of Africa received in total.
Start Up Funding in Smaller Markets
Clearly, cash raised is not evenly distributed across the continent. Central Africa as a region received only US$ 150 million in funding. In fact, since 2019 there are 20 countries entirely absent from the funding data. This means, that in the period in reference, companies in the countries have raised no money.
Seven markets, namely Senegal, Ghana, Algeria, Tanzania, Tunisia, Uganda, and the Democratic Republic of the Congo (DRC), have each secured over $100 million in funding since 2019. Among them, Ghana stands out with 42 deals surpassing the $1 million mark. Another set of six countries falls slightly short of the $100 million threshold but has consistently claimed at least $500,000 throughout the period.
These countries include Benin, Morocco, Côte d’Ivoire, Rwanda, Ethiopia, Cameroon, and Zambia. In this group, it Morocco that is noteworthy. The country has avoided dependence on a single dominant deal. Further, it also boasts a higher count of $1 million+ deals since 2019, totalling 22. Another 11 African markets have raised less than $25 million since 2019, with some considerably lower. Here Zimbabwe is an exception. The country had nine start-ups raise money. The rest of countries had less than 3 firms receive external investment since 2019.
