East Africa Emerged as The Most Funded Region for The Second Consecutive Year in Africa’s Startup Funding For 2024
A report by Africa: The Big Deal, revealed that Africa’s startup funding scene in 2024 highlighted familiar patterns, with regional leaders maintaining their dominance and emerging markets showing promise.
Once again, the continent’s “Big Four” – Kenya, Nigeria, Egypt, and South Africa – attracted the lion’s share of investments, securing 84% of all startup funding. This trend, consistent since 2019, underscores their pivotal role in shaping Africa’s entrepreneurial landscape.
East Africa Takes the Lead
East Africa emerged as the top-funded region for the second consecutive year, raising $725 million, accounting for one-third of the continent’s total. Kenya stood out as the powerhouse of the region, bringing in $638 million – 88% of East Africa’s total and 29% of all funding across Africa. Large investments in climate tech companies like d.light, SunCulture, and Basigo fueled Kenya’s impressive performance. Other East African countries, such as Tanzania ($53 million) and Uganda ($19 million), contributed modestly, with Rwanda, Sudan, and Ethiopia witnessing limited activity.
West Africa Climbs the Rankings
West Africa claimed the second spot in 2024 with $587 million in funding, recovering from its fourth-place position in 2023. Nigeria led the region, attracting over $400 million, comparable to Egypt and South Africa. The region showcased remarkable balance, with other countries like Ghana ($68 million), Benin ($50 million), Côte d’Ivoire ($33 million), and Senegal ($22 million) making significant contributions. This diverse funding distribution helped West Africa record only a minor year-on-year decline of 3%.
Northern Africa Faces Challenges
In Northern Africa, startup funding experienced a sharp decline of 35%, dropping to $478 million. Egypt, which accounted for 84% of the region’s funding, saw a significant contraction of 37%. Despite Morocco’s relatively steady performance with $70 million, the region’s overall funding dipped, reflecting a challenging year for its startups.
Southern Africa Struggles to Maintain Momentum
Southern Africa faced a similar downturn, with funding dropping 36% year-on-year to $397 million. South Africa, the region’s dominant player, attracted 99.4% of the funding but suffered a 34% decline compared to 2023. Other countries in the region recorded minimal funding activity, highlighting a lack of diversification in the startup ecosystem.
Central Africa Lags Behind
Central Africa witnessed a dramatic decline in funding, raising just $5 million in 2024 – more than 10 times lower than the previous year. The region recorded only a handful of deals, emphasizing its limited participation in the broader African funding landscape.
Key Takeaways
While Africa’s startup ecosystem continued to attract global attention, the funding trends in 2024 underscored the dominance of established markets and the challenges faced by emerging regions. The Big Four remain the cornerstone of Africa’s entrepreneurial growth, but the need for a more inclusive and diversified funding landscape is evident. As investors look ahead, fostering regional balance and tapping into underrepresented markets will be crucial for sustainable growth across the continent.
