African-based investors dominated startup investments on the continent in 2023.
They represented 35 percent of all listed investors involved in $100,000+ deals in Africa, according to Africa: The Big Deal.
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“African investors made up 35 percent of all investors that invested in Africa, in 2023, with North American investors making up 30 percent in the same period. European investors followed closely with 25 percent while Asian and Middle Eastern investors maintained 10 percent of all investments in the year 2023,” the data insight firm said.
This represents a significant shift, as North American investors previously held the top spot. This change was attributed to a decline in foreign investment.
“While it might seem intuitive, the fact that Africa was the continent where most investors in Africa were headquartered actually contrasts with the previous two years when the number one spot was held by North America (the U.S., really). But due to a dramatic drop in the number of North America-based investors in Africa between 2022 and 2023 (-47 percent YoY), Africa-based investors came on top in 2023,” the firm explained.
In 2023, only 619 investors invested in $100k+ deals, a -38 percent YoY drop. Most active investors in the continent are based in the U.S., South Africa, Nigeria and the UK.
BusinessDay recently reported that local investors remain committed to the continent and Nigeria despite the naira devaluation, inflation, and other factors eroding confidence.
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Funding fell to $2.9 billion in 2023 from $4.85 billion in 2022. So far, startups have raised $123 million in the first two months of 2024, underscoring the slowdown in funding on the African continent. Total funding for the year has been forecasted to regularise to $3.2 billion.
