According to a report by Africa: The Big Deal, in the first half (H1) of 2024, the “Big Four” countries Kenya, Nigeria, South Africa, and Egypt dominated the funding rounds, with 79% of all investments directed towards ventures headquartered in these nations.
However, there was a slight decrease from the five-year average of 83%, which is notably lower than H1 2023, which saw the Big Four attract a record 92% of regional funding since data collection began in 2019.
Among the investments attracted by the ‘big four’, Kenya emerged as the front-runner for the third consecutive semester, securing $244 million, which represents almost a third (32%) of the continent’s total start-up funding in H1 2024. This figure signifies a 5 percentage point increase from 2023. East Africa, bolstered by Kenya’s performance, attracted $285 million, or 37.5% of the total funding on the continent.
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Lately, Kenya has solidified its position as a premier destination for startup investors, earning recognition as a leading hub of innovation and entrepreneurship in Africa. The country has developed a robust tech ecosystem, particularly in Nairobi, often referred to as “Silicon Savannah”.
Kenya’s strategic location in East Africa makes it a gateway to the broader regional market. The positioning has attracted investors looking to leverage the country as a launchpad for expansion into neighboring East African countries.
In the startup funding report for H1 2024, Nigeria, long hailed as a powerhouse of startup innovation and the premier destination for venture capital in Africa, has recently seen its position slip. Once the leading magnet for startup funding on the continent, the country has recently been displaced by Kenya.
Nigeria’s slip from the top spot as the leading destination for startup funding in Africa highlights the dynamic and competitive nature of the continent’s tech ecosystem. However, Nigeria regained its position as the second most attractive market, with start-ups raising $172 million, accounting for 23% of the continent’s total.
This is a significant rebound from 2023 of 14%, though it hasn’t quite returned to its peak from 2021 and 2022. Nigeria’s share of the region’s funding stood at 64%, slightly lower than 2023’s 68%. Western Africa followed closely behind Eastern Africa with $270 million (35.5%) in total funding. Noteworthy deals in Western Africa included Benin’s $50 million (primarily through a single deal with Spiro), Ghana’s $29 million, and Senegal’s $11 million.
Egypt saw a noticeable decline in its share of start-up funding, attracting $101 million or 13% of the continent’s total, down from 22% in 2023. However, it still commanded 87% of Northern Africa’s funding. Morocco was the only other Northern African country to exceed $10 million in investments, raising $14 million. Tunisia and Algeria, which had shown promise in 2021 and 2022, saw limited activity since 2023.
South Africa experienced a significant drop, falling to fourth place with less than $100 million raised ($85 million), accounting for 11% of Africa’s total start-up funding in H1 2024, down from 21% in 2023. Despite this decline, South Africa continued to dominate its region, capturing 98% of the funding, an increase from 96% in the previous year. Overall, the Southern African region claimed 11.5% of the total funding.
In total, 22 African countries reported at least one $100k deal in H1 2024. This implies that the majority of the continent’s nations, or almost 60% did not register any significant start-up funding activity during this period. However, the concentration of funding in a few key markets highlights the disparity in investment distribution across Africa.