In 2024, African startups collectively raised $2.2 billion in equity, debt and grants (excluding exits), according to a report by Africa; The Big Deal.
While this is a notable figure, it reflects a 25% decline compared to the $2.9 billion raised in 2023. Nonetheless, the year delivered some positive signals, highlighting the resilience and the adaptability of the continent’s startup ecosystem.
A total of 188 ventures raised at least $1 million in 2024, representing only a 10% drop from the prior year. In terms of exits, the ecosystem saw 22 publicized exits, slightly up from the 20 recorded in 2023.
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The year’s decline in funding can largely be attributed to a slow start. The first half of 2024 (H1) saw just under $800 million raised, marking the slowest six-month period since 2020. However, a strong recovery in the latter half (H2) saw $1.4 billion raised a 25% year-on-year increase and an 80% jump compared to H1.
This made H2 2024 the second-best semester since the onset of the “funding winter” in mid-2022. Driving the resurgence in H2 were two significant deals in fourth quarter (Q4): Moniepoint and Tyme Group’s funding rounds, which minted two new unicorns.
Moniepoint a Nigerian fintech startup raised $110 million in Series C equity funding to accelerate its growth across Africa. Tymebank on the other hand, officially joined Africa’s exclusive club of unicorns, reaching a valuation of $1.5 billion following a successful $250 million Series D funding round. These back-to-back events were the first unicorn status announcements since early 2023, showcasing the potential for high value deals even in challenging conditions.
The overall decline in funding is primarily due to a contraction in debt financing. Debt funding, which dominated 2023 (dubbed “The Year of the Debt”) with a 38% share, accounted for 30% of total funding in 2024-a 40% year-on-year decrease. Equity funding, on the other hand, showed promising stability. The total equity raised in 2024 was $1.5 billion, just 11% lower than the $1.7 billion raised in 2023. This marks a significant improvement compared to 2023, when equity funding suffered a sharp 57% year-on-year drop.
Optimism for the Future
Despite the challenges, the rebound in H2 2024 and the stabilization of equity funding offer reasons for optimism. The African startup ecosystem has demonstrated its resilience, and the continued emergence of unicorns underscores the continent’s capacity to nurture high-growth ventures.
As the global funding landscape evolves, Africa’s startups remain a beacon of innovation, ready to leverage new opportunities in 2025 and beyond. The ability to adapt to shifting dynamics in debt and equity funding will be critical to sustaining growth and achieving greater milestones.
