In the first half of 2023, African tech startups faced a significant funding decline, raising a total of $1.19 billion. This marked a sharp drop of over 50% compared to the same period in 2022, highlighting the ongoing impact of the global economic climate on investment in the sector.
According to the latest African Tech Startups Funding Report, a collaborative effort by Disrupt Africa, Flat6Labs, MarketForce, 4Di Capital, Mercy Corps Ventures, Newtown Partners, and InsiderPR, a total of 633 African tech startups secured funding amounting to $3.33 billion in 2022. This showcased promising growth, with a 12.2% increase in the number of funded startups and a substantial 55.1% rise in total secured funding compared to the previous year.
However, the outlook for 2023 tells a different story, reflecting a regression in line with global investment trends, commonly referred to as the reset," following a period of remarkable expansion. In the first six months of 2023, only 131 African tech startups managed to raise a combined $1.19 billion, indicating a significant decline from the 303 startups and $2.275 billion raised during the same period in 2022. This decline of 52.4% aligns with the quarter-on-quarter figures from Q1, which experienced a 57.2% decrease.
Considering that the first half of 2022 accounted for approximately half of the total startups and investment for the entire year, the current trajectory suggests a decline of over 50% in year-on-year funding if the trend persists. This decline highlights the challenges faced by the African tech startup ecosystem as it navigates an evolving investment landscape influenced by global economic conditions. Download the full report: Startup Lagos H1 Mid-Year Report 2023
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