Venture debt in Africa grew 47% in 2023 amid funding slowdown

In Africa, many startups have increasingly turned to debt as a means to finance their growth. The amount of debt raised reached $1.1 billion, reflecting a significant YoY growth of +47%. In contrast, equity funding during the same period experienced a decline of -57%.

In 2022, startups in Africa secured 19 cents of debt for every $1 of equity raised. However, in 2023, this ratio increased to 65 cents, with debt comprising 38% of all funding raised, a notable surge from 16% in 2022.

Despite a -39% YoY decline in funding on the continent, this performance is viewed relatively positively in the context of a global slowdown in venture capital activity. In 2023, 500 startups raised at least $100k in Africa, compared to 821 in 2022, representing a -39% YoY decrease.