August 2024 Sees Significant Drop in African Start-up Funding, Marking a Slower Month for the Ecosystem
After a strong performance in July, where the African start-up ecosystem saw impressive funding activity, August 2024 has brought a noticeable slowdown. Start-ups across the continent announced a total of only $56 million in funding, a significant drop from the $443 million raised in July, representing an -8x decrease.
This figure is also markedly lower than the $234 million raised in August 2023, making last month the second slowest in terms of funding raised over the past four years, trailing only behind June 2024’s $42 million. Of the $56 million raised in August, the majority (87%) came through equity funding, while debt accounted for 9% and grants made up the remaining 4%. The total number of start-ups that secured funding was 27, well below the monthly average of over 40 recorded in the past twelve months.
The three largest deals in August included Dutch DFI FMO’s $10 million investment in Ghanaian fintech Fido as part of its Series B round, Solarise Africa’s $9 million funding announcement in the energy sector in South Africa, and Nigerian fintech Waza’s (a Y Combinator Winter 2023 alum) $8 million raise, which comprised $3 million in seed funding and $5 million in debt as the company emerged from stealth mode.
Notably, no exits were recorded in August, adding to the sense of a slower month for the ecosystem. Despite this downturn, 2024’s year-to-date performance remains below recent years, with a 40% year-on-year decline compared to 2023. However, there is a silver lining, thanks to the exceptional activity in July, the total funding raised in Q3 2024, with one month still remaining, has already surpassed the amounts raised in both Q1 and Q2.
While August’s lull presents a challenge, the resilience and potential of Africa’s start-up ecosystem remain evident, as the region continues to attract significant investment despite periodic fluctuations in funding activity.
Source: Africa: The Big Deal
