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African Startup Funding Drops to $780M in H1 2024; Nigeria Maintains Momentum

In the first half of 2024, startup funding in Africa experienced a significant decline, reaching $780 million compared to $1.8 billion in the same period in 2023. Despite this overall downturn, Nigeria has managed to maintain its funding inflow, according to a recent report by Africa: The Big Deal, a platform tracking startup investments across the continent.

Key Highlights:

  1. Funding Overview:
    • H1 2024 funding: $780 million
    • H1 2023 funding: $1.8 billion
    • Total 2024 funding (as of July): over $1 billion
  2. Recent Major Deals:
    • d.light: $176 million securitization facility
    • MNT-Halan: $157.5 million for expansion
    • NALA: $40 million Series A
  3. Regional Performance:
    • Nigeria maintains a strong funding inflow.
    • Kenya, Egypt, and South Africa experience significant declines.
    • Western Africa (excluding Nigeria) shows a growing share of funding.
  4. Sector Analysis:
    • Logistics and transport lead with 28% of the funding.
    • Fintech drops to second place with 23%.
    • Energy and water sector at 17%
    • The agriculture and food sectors are just below 10%.
  5. Funding Composition:
    • Increasing trend in debt financing since 2019
    • Equity funding remains significant.

Expert Insights:

Max Cuvellier Giacomelli from Africa: The Big Deal noted, “The share of funding raised in Western Africa, outside of Nigeria, is growing over time and is significant, particularly in the first half.”

Maxime Bayen highlighted the shift in sector dominance: “Logistics and Transport at 28% surpassed fintech, which is only 23%. Historically, fintech has been the leading sector, always above 30% for the past couple of years.”

Notable Deals:

Mobility startup Moove secured a $100 million investment from Uber in March, valuing the company at $750 million post-deal. The Series B round also included participation from previous investor Mubadala and new investors such as The Latest Ventures, Africinvest, and Future Africa.

Future Outlook:

Experts project total funding for African startups in 2024 to range between $1.5 billion and $2 billion, falling short of 2023 levels and significantly below the $3.2 billion raised by mid-2022.

Conclusion:

While the African startup ecosystem faces challenges in 2024, certain regions and sectors remain resilient. The shift in sector dominance and the maintenance of funding levels in countries like Nigeria highlight the dynamic nature of the continent’s entrepreneurial landscape.

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