Africa’s startup ecosystem continues to evolve, with startups raising $2.2 billion in 2024. While this represents a 25% decline from the $2.9 billion raised in 2023, it also highlights the resilience and potential of the continent’s entrepreneurs amid global economic headwinds. Each region of Africa has contributed uniquely to this progress, underscoring the diversity and strength of its innovation landscape. East Africa emerged as the continent’s leading region for startup funding in 2024, securing $725 million. Of this, Kenya played a significant role, accounting for 88% of the region’s total with $638 million. This growth underscores Kenya’s position as a hub for investment and innovation, especially in fintech, agritech, and clean energy. Meanwhile, Nigeria remains a critical player in Africa’s startup scene. The country attracted $410 million in 2024, representing a significant portion of the $587 million raised in West Africa. As the continent’s largest economy and home to a thriving entrepreneurial ecosystem, Nigeria has consistently drawn investor interest, particularly in high-impact sectors such as fintech and health tech. Industry experts have highlighted broader global trends that contributed to the decline in startup funding across Africa, including rising interest rates and tightened venture capital markets. “Specific industries may have become less attractive for investors due to factors such as the spending power of end users, heightened by inflation, and the availability of alternatives,” said Francis Vesta, an investment associate at Madica. The report by Africa: The Big Deal, a data insight firm tracking funding above $100,000, noted that the first half of 2024 recorded a sharp decline in investments. However, the second half saw a rebound, with startups raising $1.4 billion. This resurgence was partly driven by significant deals such as Moniepoint and Tyme Group achieving unicorn status in the fourth quarter. Other regions also made notable contributions. Egypt secured $400 million, while North Africa’s total funding reached $478 million. South Africa’s startups raised $394 million, contributing to the $397 million total for Southern Africa. Collectively, the “Big Four” — Kenya, Nigeria, Egypt, and South Africa — attracted 84% of all startup funding on the continent, excluding exits. While challenges persist, particularly for Nigeria, they present opportunities for growth and reform. Experts have pointed to structural issues, such as ease of doing business and currency volatility, as factors influencing investor confidence. “Nigeria’s challenges with regulatory stability and the naira’s depreciation have created uncertainty for startups and investors,” said Oturu, a policy expert. However, efforts to address these bottlenecks, including initiatives to create a more predictable investment environment, are already underway. Kenya’s rise as a regional powerhouse highlights the opportunities available across Africa. For Nigeria, this serves as a moment to leverage its unique strengths, such as its large population, tech talent pool, and vibrant entrepreneurial culture, to attract more investment. With ongoing reforms and a focus on innovation, Nigeria remains well-positioned to reclaim its leadership in Africa’s startup ecosystem. By fostering collaboration between the public and private sectors and addressing existing challenges, the country can set the stage for sustainable growth and greater investor confidence in the years ahead.
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