Nigerian Startups Led Funding Growth in Africa in Q1 2024
In a new report by Africa: The Big Deal, Nigerian startups led the funding growth in the African region, raising $160 million in the first quarter (Q1) of 2024, amid a funding drought.
This is coming after the country attracted the least funding in Africa in January this year. Following Nigeria’s recent funding growth, it highlighted investors’ optimism about the nation’s startups as mega deals were announced in Q1.
Nigeria led the funding round with $160 million, followed by Kenya with $108 million, South Africa with $72 million, and Egypt with $53 million.
According to the report, “The Big Four”, Nigeria, Kenya, South Africa, and Egypt accounted for 87 percent of all startup investments in Africa during the period.
Meanwhile, total funding raised in Q1 2024 by start-ups in Africa was almost halved compared to Q1 2023 (-47% YoY). It also remains lower than what was recorded in 2022 (an all-time record) or 2021.
On the positive side, the number of start-ups who have raised at least $1m during the quarter is higher than previous Q1s’ levels, except for 2022 of course.
While the amount raised quarterly is still at its lowest since Q4 2020, the number of ventures raising at least $1m during a quarter has started to bounce back in Q3 2023 and has continued to do so consistently.
On Equity and debt, the report noted that equity levels in Q1 2024 were quite comparable to Q4 2023 levels (with ‘only’ a -9% decrease QoQ), while debt levels dipped (-44% QoQ).
The report further stated that the key now is for investors to recognize the potential of the African tech ecosystem and provide the necessary support for startups to thrive.
