Kenyan startups continued to dominate African startup funding in 2024, raising US$638 million, despite a 25% decline in overall funding across the continent.
According to Africa: The Big Deal report, the decline was largely attributed to a decrease in debt financing.
Key Findings
Kenyan startups secured 88% of East African funding and 29% of all funding across the continent.
“East Africa attracted the most funding for the second year in a row: $725m in total (-18% YoY), i.e. 1 in 3 dollars raised on the continent in 2024. Kenya alone ($638m) made up 88% of the total raised in the region, and 29% of all the money raised on the continent,” the report said.
While East Africa and West Africa showed some resilience, funding declined significantly in Northern and Southern Africa.
“In Northern Africa though, funding ($478m, 22%) fell by -35% between 2023 and 2024, mostly due to a -37% YoY contraction in funding (the most acute of the Big Four) in Egypt, which represented 84% of all the funding raised in the region last year. While Morocco ($70m, #5) held up relatively well, it wasn’t enough to make up for it,” the report added.
However, Kenyan startups, particularly in the climate-tech space, received significant funding.
Challenges
The global economic slowdown and tightening of credit markets significantly impacted venture capital funding in 2024.
Similarly, funding remains highly concentrated in a few key markets, with limited investment flowing to startups in many parts of the continent.
Despite the challenges, the long-term potential for African startups remains significant. Continued efforts to foster a supportive ecosystem, including improving access to funding, nurturing talent, and addressing regulatory hurdles, will be crucial for driving sustainable growth.
Financial Services Lead Africa’s Private Capital Market in Q3 2024
