African Startups See Dramatic Decline in Funding in H1 2024 Amid Shift Towards Debt Financing
According to a report by Africa: The Big Deal, in the first half of 2024, African startups faced a significant slowdown in funding, marking the lowest period since late 2020.
The total funding amounted to $780 million, reflecting a 31% decline from the latter half of 2023 and a 57% drop from the first half of 2023.
Notably, debt financing surged, making up one-third of the total funding, a significant increase from the 17% average since 2019. The bulk of investments, about 79%, went to the “Big Four” countries: Kenya, Nigeria, South Africa, and Egypt.
Kenya led with $244 million, showcasing its growing dominance. Nigeria followed with $172 million, Egypt with $101 million, and South Africa with $85 million. Other nations such as Benin, Ghana, Uganda, Morocco, and Senegal also secured notable investments.
Interestingly, the Transport & Logistics sector surpassed fintech to become the top-funded sector, accounting for 28% of total investments, driven by major deals involving companies like Moove and Spiro. Fintech, though second in total funding, led in the number of deals exceeding $1 million.
A significant 85% of the funding went to startups without a female founder, and 92% was directed to companies with male CEOs, highlighting persistent gender disparities in access to capital.
Source: Africa: The Big Deal
