African tech startup investment fell 28% to $2.4bn in 2023

STARTUP VENTURE CAPITALFebruary 2, 2024 at 11:34 PM UTC

TLDR

Total investment into African tech startups declined by 27.8% in 2023 due to global capital shortage.
Nigeria, Egypt, South Africa, and Kenya are the top four countries in terms of funding.
Nigeria experienced a significant decline in funding, with a drop of 59% to nearly $400 million.

Total investment into the African tech startup ecosystem fell by 27.8% to $2.4 billion in 2023 as the impacts of the global capital shortage began to make themselves felt on the continent. This is according to the ninth edition of the annual African Tech Startups Funding Report released by Disrupt Africa.

This is the first time the sector, which has expanded so exponentially in the last few years, has declined since 2016, though a fall in the funding of less than a third is an improvement on projections from earlier in 2023 when a decline of 50% was deemed likely.

Nigeria, Egypt, South Africa, and Kenya remain Africa’s “big four” from a funding perspective, securing a larger share of total funding between them than in 2022. Nigeria, however, saw funding decline tremendously, by 59% to just shy of $400 million.

Key Takeaways

Africa, like the rest of the world, has been affected by the global “funding winter”, with venture capital drying up and several leading startups forced to cease operations or significantly restructure their operations. While the African tech space had an impressive 2022, bucking global trends to see total funding increase beyond the $3 billion mark for the first time on record, 2023 signified a reset of sorts. A total of 406 startups raised a combined total of $2.4 billion over the year. Though still the third-best year on record in terms of funded ventures, and the second-best for total capital secured, this represented a significant decline in 2022.

Venture Capital

Venture Funding

Africa

Startups

Disrupt Africa

Angel Investing