The African start-up ecosystem has recorded a significant milestone in 2024, surpassing the $1 billion mark in total funding raised. This was revealed in a report by Africa: The Big Deal.
The surge in funding for startups was driven by several large deals announced in mid-July, which include a $176 million securitization deal secured by d.light, a global provider of affordable household solar solutions, and a $157.5 million funding round by Egyptian Fintech MNT-Halan aimed at fueling their expansion.
In addition to these major deals, other noteworthy contributions include Tanzania Fintech NALA’s $40 million Series A round earlier in July, which became one of the largest Series A transactions in Africa, and a series of other smaller funding rounds.
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Part of the report reads,
“The ecosystem closed H1 2024 with just under $800 million raised (excluding exits), and it was only a matter of time until it crossed the $1 billion mark. Things happened a little faster than expected though thanks to two mega deals announced since the middle of the month: d.light’s new USD$176 million securitisation facility and MNT-Halan’s $157.5m raise to fuel their expansion. If we add NALA’s $40m Series A from earlier this month and other smaller deals, we’re getting very close to $400 million”.
These fundings have collectively pushed the total amount raised in July alone close to $400 million, making it the most successful month for fundraising in Africa in over a year. This figure also exceeds the total amount raised throughout the entire second quarter of 2024, indicating a significant acceleration in investment activity.
Although the pace of investment has not yet fully recovered to the highs of the past three years when the $1 billion threshold was reached by May 2021, April 2023, and as early as February 2022, the recent uptick is a positive sign. It suggests that 2024 may ultimately outperform the results of 2019 and 2020 periods, which are often used as benchmarks due to their slower investment pace.
In those years, the $1 billion mark was only reached in November, underscoring the current year’s relative strength. This renewed investor confidence highlights the resilience and potential of African start-ups, which have already raised more funding in 2024 than in the entire year of 2020.
The ecosystem’s growth is likely fueled by a combination of factors, which include increased global investor interest in African markets, the maturation of local start-ups, and the continued expansion of sectors such as fintech, renewable energy, and digital services.
The record-breaking funding in July underscores a growing global confidence in the potential of African startups to deliver high returns. Investors from the US, Europe, and Asia are increasingly participating in funding rounds, often in collaboration with African venture capital firms. This trend is not only bringing much-needed capital but also providing access to global networks and expertise.
As the year progresses, the African start-up ecosystem is poised for further growth and investment, potentially setting new records and attracting even more global attention.