Nigerian Startups Receive Lowest Funding in 2023, Kenya Tops the List
A recent report titled Africa: The Big Deal has highlighted the funding landscape for startups in Africa, revealing that Nigerian startups received the lowest funding in 2023. Kenya, on the other hand, emerged as the country that received the highest amount of funding in the continent.
The report indicates that the Big Four countries collectively accounted for a staggering 87% of all startup funding in Africa, marking their highest share since 2019. Kenya led the pack with an impressive $800 million in funding, constituting 28% of the total funding in the continent. Egypt followed closely behind with $640 million, South Africa secured $600 million, while Nigeria, the most populous nation, received the least funding at $410 million.
The report emphasized that startups from these Big Four countries accounted for 71% (357 out of 500) of the continent’s startups that secured $100,000 or more in funding in 2023.
BusinessDay reported a significant decline in funding, with a total of $2.9 billion raised in 2023 compared to the $4.8 billion raised in 2022, indicating a 39% year-on-year decline.
Let’s delve into the specifics of the eight largest funding destinations for startups in Africa in 2023 mentioned in the report:
Kenya, with its strategic location, stable political environment, and tech-savvy population, secured the top position as Africa’s leading funding destination for startups, attracting an impressive $800 million in investments. Nairobi, the capital city, has emerged as a thriving hub for fintech and agritech startups, alluring global investors looking to tap into the country’s dynamic market.
Egypt came in second, securing $640 million in startup funding. The North African nation has witnessed a surge in entrepreneurial activity, driven by its youthful population and a government committed to fostering innovation. Cairo, with its growing tech community, has become an attractive investment destination across various sectors such as e-commerce, health tech, and renewable energy.
South Africa, a long-standing player in Africa’s economic landscape, maintained its position as a key startup funding destination with a total of $600 million in investments. Johannesburg and Cape Town, in particular, have experienced significant growth in sectors like fintech, edtech, and health innovation. The country’s well-established infrastructure and financial institutions contribute to its appeal among investors.
Nigeria, despite being the most populous nation, secured the fourth spot with $410 million in startup funding. Lagos, Nigeria’s commercial capital, has become a bustling hub for tech startups, especially in the fintech and logistics sectors. Despite facing challenges, Nigeria’s large market and entrepreneurial spirit continue to attract both local and international investors.
Surprising many, Benin Republic emerged as a noteworthy destination, securing $71 million in startup funding. The West African nation has made significant strides in creating a conducive environment for entrepreneurship, with a focus on sectors like agriculture, renewable energy, and e-commerce.
The Democratic Republic of Congo (DR Congo) entered the spotlight with $62 million in startup funding. Despite facing socio-economic challenges, the country has witnessed a growing interest in tech-driven solutions, particularly in healthcare and sustainable development.
Ghana, known for its political stability and welcoming business environment, secured $57 million in startup funding. Accra, the capital city, has seen a surge in tech startups, attracting investments in areas such as mobile banking, agribusiness, and renewable energy.
Rwanda and Senegal shared the eighth position, with each country securing $44 million in startup funding. Both nations have actively pursued policies to promote innovation and entrepreneurship, leading to increased investor confidence in their respective markets.
In conclusion, Nigeria’s startups received the lowest funding in 2023, while Kenya emerged as Africa’s leading funding destination for startups, securing an impressive $800 million. The funding landscape for startups in Africa continues to evolve, with various countries making significant progress in fostering entrepreneurship and attracting investment.
