Startup investments in Africa fell by more than 80% in January
TLDR
- African startups raised $83 million across 31 disclosed deals in January 2024, a significant decline from the previous year.
- However, excluding a single large deal in January 2023, funding for African startups only declined by 16.2% year-on-year.
- The underlying growth of the African tech ecosystem remains stable, indicating resilience despite the slowdown in funding activities.
African startups experienced a slow start to 2024, raising just $83 million across 31 disclosed deals in January, according to data from Africa: The Big Deal. This marks a significant decline from the $545.1 million raised in 20 deals during the same month in 2023, representing an 84.8% year-on-year drop.
However, it's important to note that the fundraising activity in January 2023 was heavily influenced by a single large deal: the $443 million acquisition of AI company Instadeep by BioNTech. Excluding this outlier, African startups in January 2023 raised around $99.1 million, resulting in a more moderate year-on-year decline of 16.2%.
This indicates that the underlying growth of the African tech ecosystem remains relatively stable, despite the apparent slowdown in headline-grabbing funding activities.
Key Takeaways
In January, the three sectors securing the highest funding are agritech with $26.3 million, cleantech with $18.1 million, and healthtech with a more modest $13.5 million. Notably, various sectors within the ecosystem, particularly fintech, have witnessed a decline in funding compared to previous years. As a global funding winter looms, investors are increasingly prioritizing startups with established track records of traction and growth, resulting in fewer resources available for speculative ventures. Of the four logistics startups that raised funds in January 2024, three—Bosta, FriendlyM, and Roboost—originated from North Africa, specifically Egypt. This trend underscores the growing prominence of the North African region, particularly Egypt, in attracting investment within the logistics sector.
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