Nigerian startups attracted 30% of $15 billion raised by African startups in 5 years

Nigerian tech startups are responsible for 30 per cent of the total startup funding raised by tech startups on the continent in the last five years. This was revealed by startup analytics organisation, Africa the Big Deal in a new report which analyses the state of funding on the continent since 2019.

According to the report, African startups have raised nearly $15 billion since 2019 with Nigeria contributing $4.4 billion of the total. This makes the West African country the largest tech startup investment destination on the continent. Kenya comes a distant second, contributing $2.9 billion to the total funding. South Africa comes next with startups in the country raising $2.4 billion while Egypt is next with $2.3 billion raised by the North African country.

Together, these countries tagged the Big Four countries, Nigeria, Kenya, South Africa and Egypt attracted 85 per cent of total startup funding to Africa since 2019. The Big Four also accounts for more than three quarters (25 per cent for Nigeria) of all ventures having raised $1m or more in the last four years.

Senegal and Ghana are two countries following behind the Big Four although it would take a while before any of them could break through to form a Big Five as they have only managed to attract nearly 6 times less funding than the last of the Big Four, Egypt since 2019. Senegal was able to attract $392 million over the last five years while Ghana has attracted $389 million in the period under review.

Other countries that have contributed over $100 million include Tanzania with $242 million, Algeria with $185 million, Uganda with $180 million, Tunisia with $171 million, Morocco with $156 million and the Democratic Republic of Congo with $113 million.

Other countries like Rwanda, Ivory Coast, Benin, Ethiopia, Zambia, Cameroon, Namibia, Zimbabwe, Mali, Togo, Sudan and Sierra Leone have all attracted between $10 million and $100 million in funding.

See also: 121 African tech startups raised $466m in Q1 2024, led by Nigeria’s Moove

African startup funding slowdown

Startup funding has continued to decline in recent times as the continent continues to witness a funding winter. This was buttressed in the previous month (April 2024) when African startups were only able to raise $75 million across 25 deals. This figure excludes exits recorded on the continent and represents a 47% drop Year on Year. It also represents the second-lowest amount raised in a month since 2021, the lowest being March 2023 when startups on the continent managed to raise $69 million.

On a broader scale, for the entire 2024, African startups have been able to raise $542 million across 153 deals above $100,000. This is considerably less than in the past three years. Overall, the number represents a 22 per cent decrease in deal number and a 47 per cent drop in deal value.

Despite the low numbers, there are however some silver linings. First, two new exits happened in April 2024 with Ghanaian health tech Rivia acquiring SaaS provider Waffle, and Kenyan transport tech BuuPass acquiring QuickBus to accelerate their expansion to Nigeria and South Africa.

Furthermore, there were also two Series B funding rounds in Africa last month, while there had only been one in the entire first quarter of 2024. Kenya-based SunCulture which markets solar irrigation systems disclosed its $27.5 million Series B round on April 12. Three days later, it was Pula, an insurtech also based in Kenya, announced their $20 million series B round. Combined, these two deals represented 63% of all the funding raised on the continent last month.

Furthermore, investments into climate tech represented a third of both the number of deals and the amount that has been raised in 2024, representing an all-time high for comparable periods. Also, while the number of deals valued above $100,000 has fallen 22 per cent Year on Year, the number of deals valued above $1 million has gone up. Finally, 10 per cent of the funding in 2024 so far has gone to startups with a female CEO. This is higher than 6 per cent and 3 per cent during the same period in 2023 and 2022 respectively.

See also: Nigeria’s Moove makes Top 10 global fintech funding in Q1 2024 with $100 million raise