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Nigeria Loses Top African Startup Investment Spot to Kenya as Funding Plummets 65%

Foreign investments into Nigeria’s booming tech and startup scene fell a dramatic 65.83% in 2023, totalling just $410 million compared to $1.2 billion in 2022.

This huge drop means Nigeria has lost its ranking as the number one destination for startup investments in Africa. Kenya took the top spot in 2023, with its startups raising close to $800 million over the year.

According to data compiled by research organisation Africa: The Big Deal, Nigeria plunged to 4th place among African nations, falling behind Kenya, Egypt ($640 million), and South Africa ($600 million) in total capital raised.

Nigeria Did Have Most Startups Raise Funds

Despite the funding decline, Nigeria still had the highest number of startups—146—raising over $100k in 2023. This represented 29% of all African startups hitting that milestone.

However, the average amount secured per startup decreased significantly. Quoting Africa: The Big Deal:

“Nigeria is where the most dramatic change happened in 2023. While the country still claimed the highest number of startups to raise $100k or more, the amount they raised was divided by 3 [compared to] 2022 to reach $410m.”

Two Key Funding Trends Emerge as Investments Fall

There were two other notable trends in the report:

  1. Kenya consolidated its position, attracting over 28% of total capital ($2.9B), despite its own 25% year-over-year decline.
  2. South Africa was the only “Big Four” country not recording a drop in startup investments, with funding rising 8% to $600 million.It maintained a 97% share within Southern Africa.

Overall, though, Africa saw startup investments fall nearly 40% to end 2023. The days of skyrocketing year-to-year growth may be over, at least temporarily.

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