African Startup Funding Trends in 2024

The landscape of African startup funding in 2024 continues to face challenges as tech startups on the continent raised $780 million in the first half of the year. According to the recent funding report from African funding analytics company, Africa the Big Deal, the figures reveal a significant decline compared to previous periods.

Decline in Funding

The funding obtained in the first half of 2024 witnessed a 31 percent decrease from the second half of 2023. Moreover, when juxtaposed with the funding received in the first half of 2023, there was a substantial 57 percent plunge. This downward trend underscores a concerning pattern in the flow of investment into African tech startups.

Funding Sources

Out of the total $780 million raised, two-thirds amounting to $513 million was in the form of equity, demonstrating an improvement from the 60 percent equity share in 2023. On the other hand, 33 percent came from debts, a decrease compared to the 38 percent recorded in the previous year. A mere one percent of the total funding was in the form of grants, indicating a minimal contribution in the funding mix.

Destination Highlights

Kenya emerged as the top destination for African tech startup funding, securing $244 million, which accounted for 32 percent of the total funding in the first half of 2024. Following closely was Nigeria with $172 million, representing 23 percent of the total funding. Egypt and South Africa also featured prominently in the funding landscape, attracting $101 million and $85 million, respectively.

Sector Analysis

The Transport and Logistics sector led the funding charts by attracting $218 million, constituting 28 percent of the total funding in the first half of 2024. Fintech followed closely with $186 million, occupying 24 percent of the total. Energy and Water sectors also secured significant investments, raising $132 million, accounting for 17 percent of the total funding. Noteworthy deals in the Transport and Logistics sector, such as Moove and Spiro, play a vital role in bolstering the sector's financial attractiveness.

Gender Disparity

Despite efforts to promote gender diversity in the tech startup funding space, male-led startups continued to dominate the funding arena in the first half of 2024. A staggering 85 percent of the funding was channeled to startups without a single female founder, while 92 percent went to startups with a male CEO. The disparity highlights the pressing need for a more inclusive and equitable funding environment.