Investor Activity in Africa Slows in H1 2024 But Key Players Remain Active
In a report by Africa; The Big Deal, the investment landscape in Africa has seen a slowdown in activity in the first half (H1) of 2024 compared to previous years. While five investors have completed at least one deal per month on average during H1 2024, this number lags behind H1 2023 (with seven active investors) and falls significantly short of the 33 seen in H1 2022.
Despite the downturn, nearly 300 investors have still been involved in at least one deal worth $100,000 or more, although this is a 27% decline from the ~400 active investors in H1 2023 and represents a sharp drop from the ~700 investors in H1 2022.
A key highlight from H1 2024 is the decline in repeat investments. Only 18% of investors have participated in more than one $100k+ deal during this period, compared to 23% in H1 2023, 25% in H1 2021, and 29% in H1 2022. This shift underscores the more cautious approach many investors are taking in the current market.
Top Investors in H1 2024
Launch Africa has emerged as the most active investor in H1 2024. After a relatively quiet period in 2023, following the close of their Seed Fund I and the fundraising for Seed Fund II, they have been signing deals almost every other week on average. If they maintain this pace, Launch Africa is on track to match or surpass their 2023 total of 19 deals.
Techstars, another major player on the continent, ranked second in terms of deal activity. However, after a remarkable 2023 with 56 deals (averaging more than one deal per week), their activity in H1 2024 has slowed significantly. The firm announced nine deals during the first half of the year, down from 28 deals in H1 2023, making it challenging for them to match their 2023 performance.
Other Key Investors
Three other investors tied for third place, each making seven investments in H1 2024: 54 Collective (formerly Founders Factory Africa), Catalyst Fund, and Renew Capital. Both 54 Collective and Catalyst Fund are on track to match their 2023 deal totals (16 and 13 deals, respectively) if they continue at this rate. Renew Capital has already surpassed its 2023 performance with seven deals in H1 2024, compared to just five deals in total last year.
Two other investors, DFC and Baobab Network, have each made five deals in H1 2024, already outpacing their total deal count for all of 2023. Y Combinator, another prominent investor in African startups, might still manage to match its 2023 total of 12 deals if it picks up the pace in the second half of the year.
Notable Absences
Interestingly, several key players from 2023 have been quieter in H1 2024. Ventures Platform and Norrsken, both of which had averaged more than one deal per month in 2023, have made fewer than five deals so far this year. Similarly, past serial investors like Flat6Labs and LoftyInc have been less active, though both are currently raising new funds and are expected to return to the spotlight soon.
A Shift in the Investment Landscape
The overall slowdown in investor activity in H1 2024 reflects broader market conditions, including global economic uncertainty and tighter financial conditions. However, the resilience of key players like Launch Africa, Techstars, and 54 Collective, as well as the emergence of newer active investors like Renew Capital and Baobab Network, suggests that there is still strong interest in Africa’s burgeoning tech ecosystem.
While the second half of 2024 may not see a full return to the activity levels of 2022, the ongoing fundraising efforts by key VCs and the appetite for deals in a rapidly digitizing Africa suggest that investment momentum may pick up in the coming months. Investors are likely to continue focusing on high-growth sectors, particularly fintech, healthtech, and other digital services that are helping to reshape the continent’s economy.
