Kenya emerges top destination for African startup investments in 2024

• Kenya has emerged as the top destination for African startup investments in 2024
• Nigeria attracted the second highest investments on the continent, raising $410 million out of the $587 million raised in West Africa in 2024
• Much of the investments in African startups were recorded in the second half of the year

Kenya has recorded more investments in African startups ahead of Nigeria for the second consecutive year.

In 2024, the East African region attracted the highest startup funding on the continent, worth $725 million, with Kenya accounting for $638 million or 88 per cent of the region’s total raise in the year.

According to a report by Africa: The Big Deal, capital raised by African startups dropped by nearly 25 per cent to $2.2 billion in 2024.

The startups’ capital raises from equity, debt, and grants (excluding exits) saw a decline in 2024 compared to the $2.9 billion that was raised in 2023, and a 53 per cent drop from the $4.6 billion raised in 2022.

The data further revealed that a total of 188 ventures raised $1 million or more in 2024 (excluding exits), which is 10 per cent less than what was recorded in 2023.

Funding raised in Africa by the Big Four

An analysis of the funding details shows that the Big Four – Kenya, Nigeria, Egypt, and South Africa – attracted 84 per cent of all start-up funding (excluding exits) on the continent.

The analysis revealed that Nigeria attracted $410 million in 2024 out of the $587 million raised in West Africa.

Egypt raised $400 million even as financing to Northern Africa fell by 22 per cent to $478 million in the year.

South Africa raised $394 million, with funding to the region falling by 18 per cent to $397 million.

The decline in startup investment in Nigeria has been attributed to the tough business environment occasioned by surging inflation, heightened exchange rate volatility, currency depreciation, and policy inconsistencies, such as abrupt changes in fiscal or regulatory frameworks, among others.

Details of funding into other countries

The report also shows that Morocco recorded $70 million worth of investments, while Ghana came sixth highest investment destinations, receiving $68 million in investments in 2024.

Tanzania and Benin Republic received $53 million and $50 million in startup investments in 2024, respectively, followed by Cote d’Ivoire with $33 million worth of investments.

Further analysis shows that Senegal received $22 million in startup investments, while Uganda recorded startup investments worth $19 million in 2024.

H2 2024 saw a rebound in African startups’ investment

According to the report, much of the capital raised in 2024 was recorded in the second half (H2) of the year, with the first half recording a sharp decline.

It noted that the funding rebound in H2 2024 saw a $1.4 billion raise, which marked the second-best semester since the beginning of the ‘funding winter’ in mid-2022.

The report also highlighted that the emergence of two unicorns in Africa in H2 2024 was a major factor responsible for the uptick in funding recorded in the year.

Recall that on October 29, 2024, Nigeria-based Moniepoint Inc. raised $110 million in equity financing to become Africa’s eighth startup to have achieved unicorn status.

Moniepoint joined Africa’s unicorn league that already had the likes of Interswitch, Opay, Flutterwave, Wave, Andela, Chipper, and MNT-Halan.

The Series C financing round further boosted the fintech’s valuation to at least $1 billion, increasing from around $400 million in a 2022 funding round where it raised $50 million.

On December 17, 2024, South Africa’s Tyme Group raised $250 million in a Series D round to reach a $1.5 billion valuation, becoming Africa’s ninth unicorn.

Africa: The Big Deal noted, “Overall, start-ups in Africa have raised $780 million (excl. exits). This represents a 31 per cent drop compared to H2 2023, and an even starker 57 per cent decline compared to H1 2023 if we want to account for seasonality.”

7 African AI startups founded by Nigerians

Meanwhile, TheRadar reported that the Artificial Intelligence (AI) revolution brought about innovations and startups leveraging technology to address pressing human needs.

The African continent is not left behind in this wave of revolution. The continent boasts a handful of startups changing the world, most of which are founded by Nigerians or located in Nigeria, including these seven.