Nigerian startups have emerged as the largest recipients of funds raised by African startups over the last five years, securing 29 per cent of the total $15 billion investments made across the continent. This was revealed in the latest report by the research firm ‘Africa: The Big Deal,’ which analyzes funding received by African startups.
According to the report, Nigerian startups attracted $4.4 billion out of the $15 billion invested in Africa between 2019 and 2023. This positions Nigeria at the forefront of the African startup ecosystem, ahead of Kenya, South Africa, and Egypt—collectively known as the Big Four. These four countries alone have garnered 84 per cent of all startup funding in Africa since 2019.
The report also highlights that the Big Four are home to more than three-quarters of all ventures that have raised $1 million or more during this period, with Nigeria alone accounting for 25 per cent. South Africa slightly edged out Kenya in the number of startups raising over $1 million.
The two closest contenders to the Big Four are Senegal and Ghana, though their funding levels have been significantly lower. Since 2019, these countries have received almost six times less funding than Egypt. The report suggests that Ghana holds a stronger long-term position compared to Senegal as a potential Big Five contender. Ghana has nearly three times as many startups raising over $1 million, including 13 that have crossed the $10 million mark, compared to Senegal, where 76 per cent of all startup funding since 2019 has gone to a single company, Wave.
‘Africa: The Big Deal’ report also points out that other markets where startups have raised over $100 million since 2019 include Tanzania, Uganda in East Africa, and Algeria, Tunisia, and Morocco in North Africa. Among these, Morocco shows a more balanced distribution of startup funding, with close to 40 ventures raising $1 million or more since 2019. In contrast, Algeria has seen only a couple of startups securing over $1 million, with Yassir claiming 98 per cent of the total amount. Tunisia has a dozen ventures raising $1 million plus, with over two-thirds of the capital going to InstaDeep.
Beyond these key markets, 12 African countries have attracted between $10 million and $100 million in the past five years, while an additional 11 countries have seen some activity, albeit limited. However, 19 African markets have not registered any deals at all during this period.
Despite these significant figures, the report notes a decline in funding for African startups as investors exercise caution amid global economic uncertainties. In the first quarter of 2024, funding for African tech startups dropped by more than 45 per cent to $466 million, marking a 9 per cent quarter-on-quarter decline and a 47 per cent year-on-year decline. This represents a 51.36 per cent drop from the previous year, when startups raised at least $369 million across 64 publicly announced deals.
The first quarter of 2024 saw Nigerian mobility startup Moove leading the funding rounds, securing $110 million. This highlights the ongoing interest in Nigerian startups, despite the overall decline in investment across the continent.
Between Depleting Workforce And Declining Productivity