African startups have finally seen some light at the end of the tunnel after a two-month funding hiatus. According to the founder of African startup deal database Africa The Big Deal, Max Cuvellier, May 2023 was the best May the ecosystem has ever had in terms of funding raised. African startups raised a total of $645m, which puts them on track to surpass the $5bn they raised last year. This remarkable increase was mostly due to two Kenyan startups raising significant amounts. Asset financing platform M-Kopa raised over $250m in equity and debt, and off-grid solar energy company Sun King announced a $130m securitization led by Citibank.
Earlier this year, in February, African startups recorded their highest ever funding, raising $700m. However, there was an enormous decline in funding in March, with only $70m raised, causing a sharp decrease in confidence for another exceptional year. April also seemed quiet, but May has proved to be a game-changer for African startups. The significant amount raised gives startups hope for the future and signals the possibility of equal growth as last year’s.
At a time when funding was scarce, African startups have been able to raise such significant amounts, particularly in the midst of the coronavirus pandemic.Overall, African tech has emerged stronger from the pandemic, with significant investment from global companies and investors.
Several factors have contributed to the growth of African startups. As African markets become more attractive and innovative, investors from around the world are keen to fund startups. Moreover, the number of private equity and venture capital funds has increased, making it easier for startups to raise funds.
To conclude, African startups have emerged from a two-month funding hiatus by raising more than $645 million in May 2023. With this increase, they are on track to surpass last year’s funding, putting a positive outlook on investment for the rest of this year. As more investors continue to look to Africa’s growing markets, the future looks bright for the continent’s startups.
