African startups raised a significantly lower amount of funding in January 2024 compared to the same period last year, according to data from Africa: The Big Deal. While the headline figures show an 84.8% year-on-year drop from $545.1m to $83m, excluding a single large acquisition in 2023 paints a less dramatic picture with a 16.2% decrease. This suggests that the underlying growth of the African tech ecosystem remains stable despite the global funding slowdown.
The sectors attracting the most investment in January 2024 were agritech ($26.3m), cleantech ($18.1m), and health tech ($13.5m). However, fintech and other sectors saw a decline in funding compared to previous years. This reflects a global trend of investors focusing on established startups with proven track records during uncertain economic times.
Interestingly, three of the four logistics startups that raised funds in January —Bosta, FriendlyM and Roboost— came from North Africa, particularly Egypt. This aligns with the growing success of Egyptian mobility startup Swvl, which achieved profitability in 2023 after years of losses. This suggests that Egypt’s logistics sector could see increased investor interest in the coming year.
New Players and Continued Support for African Startups
Despite the funding slowdown, January 2024 saw new and established investors reaffirm their commitment to the African tech ecosystem. The European Investment Bank (EIB) invested $30 million in Seedstars, focusing on francophone Africa, while the African Development Bank (AfDB) provided an additional $10.5 million. Additionally, prominent figures like Iyin Aboyeji and Mia von Koschitzky-Kimani launched Accelerate Africa, a Nigerian accelerator supporting early-stage startups.
Egypt also saw the launch of T-vencubator, a hybrid VC firm and incubator aiming to invest in promising Egyptian talent. This unique model could provide valuable support for early-stage startups in the country.
