African Startups Raised $2.2B in 2024 Despite Funding Challenges
African startups faced a rollercoaster year in 2024, raising $2.2 billion through equity, debt, and grants (excluding exits), according to a report by Africa: The Big Deal. While the figure marks a 25% decline from the $2.9 billion raised in 2023, a deeper look reveals an ecosystem that remains dynamic and resilient, driven by a strong second half of the year.
Funding Snapshot
Despite the dip in total funding, 188 startups managed to secure $1 million or more, only 10% fewer than in 2023. Exit activity offered a bright spot, with 22 exits made public in 2024, surpassing the 20 reported the previous year.
However, the decline was felt most acutely in the year’s first half (H1), which saw less than $800 million raised—a low not seen since 2020. This sluggish start set the tone for a challenging year. But H2 turned the tide, with $1.4 billion raised—a remarkable 80% surge compared to H1 and a 25% year-on-year increase.
Two Unicorns Shine Bright in Q4
A significant contributor to the H2 rebound was the emergence of two new unicorns. Moniepoint and Tyme Group closed mega-deals in Q4, marking the first unicorn births since early 2023. These back-to-back successes underscored the ecosystem’s ability to attract large-scale investments, even amid a broader funding downturn.
Debt Shrinks, Equity Holds Steady
The overall decline in funding is largely attributed to a sharp contraction in debt financing. In 2023, debt accounted for 38% of total funding, earning it the title “The Year of the Debt.” However, in 2024, debt’s share dropped to 30%, with total debt funding contracting by 40%.
Equity funding proved to be more resilient. Startups raised $1.5 billion in equity—only 11% less than 2023’s $1.7 billion. This represents a significant stabilization after the steep 57% drop in equity funding seen in 2023.
A Hopeful Outlook
While the $2.2 billion raised in 2024 represents a decline, the resilience shown in H2 demonstrates the underlying strength of Africa’s startup ecosystem. The stabilization of equity funding and the ability to generate unicorns amid challenging conditions highlight the continent’s growth potential.
As African startups navigate the global funding landscape, 2024 serves as a reminder of their ability to weather storms and adapt to shifting dynamics. With the lessons learned this year, the ecosystem is well-positioned to capitalize on new opportunities and reach greater heights in 2025.
