Nigeria misplaced the highest place by way of startup funding in Africa to Kenya in 2023 as startups within the East African nation attracted the most important quantity of funding within the 12 months, topping the desk with about $800 million.
That is in line with the analysis of the African startup funding in 2023 launched by analysis outfit, ‘Africa: The Large Deal’.
The evaluation of the ‘Large 4’ in Africa comprising Nigeria, Kenya, Egypt, and South Africa, exhibits that Nigeria slipped from the first place it had occupied in 2021 and 2022 to 4th place as startups within the nation raised the least quantity in contrast with the opposite three.
Describing the change in fortune for Nigerian startups in 2023 as dramatic, the analysis agency acknowledged that Nigerian startups raised a complete of $410 million, lower than half of what they raised in 2022 and 2021.
Dramatic change
Highlighting the efficiency of the 4 main startup nations in Africa for the previous 12 months, the analysis agency stated:
- “Nigeria is the nation the place essentially the most dramatic change occurred in 2023. Whereas the nation nonetheless claimed the very best variety of start-ups to lift $100k or extra (146, 29% of the continent), the quantity they raised was divided by 3 YoY (-67%) to achieve $410m, in comparison with $1.2b in 2022, and $1.7b in 2021.
- “Because of this, its share of Western African funding continued to drop to achieve 68%, down from 85% in 2021, and 77% in 2022. That is the bottom regional share of any Large 4 market since we began accumulating the information in 2019.”
‘The Large 4’ scooped 87% in 2023
Nairametrics had reported earlier that startups throughout Africa raised a complete of $2.9 billion in 2023 representing a 39% year-on-year decline in funding. Of this quantity, ‘Africa: The Large Deal’ stated the ‘Large 4’ attracted 87% of all of the start-up funding in Africa, their largest share since 2019.
In accordance with the report, Nigeria, Kenya, South Africa, and Egypt had been residence to 71% (357 out of 500) of the start-ups who raised $100k or extra on the continent final 12 months.
It added that Kenya attracted essentially the most funding, 28% of the continent’s whole.
- “Whereas Kenya suffered a decline (-25% YoY), its share of Japanese Africa’s funding grew from 86% in 2022 to 91% in 2023. 93 start-ups raised $100k or extra throughout the interval (19% of Africa’s whole).”
In Egypt, 48 startups had been recorded to have raised $100k+ in 2023, and this got here because the lowest quantity out of the Large 4.
- “However due to a YoY decline (-20%) extra average than Kenya and most significantly Nigeria, it was sufficient for the nation to say the second spot. Egypt’s share of North African funding grew considerably from 72% in 2022 to 95% in 2023 (+23pp, by far the strongest development), due each to the magnitude of MNT-Halan’s fundraising, and Algeria and Tunisia’s incapacity to repeat their sturdy 2022 efficiency,” the report acknowledged.
The report additional disclosed that South Africa’s share of regional funding stays the very best at 97%. The 70 start-ups who raised $100k or extra within the nation cumulated $600 million in funding, which is 21% of the continent’s whole. South Africa was the one one of many Large
4 to not see its whole funding shrink between 2022 and 2023 (+8% YoY).
