A recent report highlights that African startups raised over $645 million through more than 50 funding deals in May 2023. This marks a significant increase from the $129.8 million raised in April, with Fintech and energy sectors leading the way. The top three startups that raised significant funding were M-KOPA, Sun King, and TymeBank. M-KOPA seeks to increase its customer base from three to more than 100,000 customers per month in Kenya, Nigeria, and Ghana. Meanwhile, Sun King plans to increase operations in Africa and Asia after raising $150 million in funding. TymeBank, an exclusively digital retail bank from South Africa, raised $77.8 million.
The report warns against over-reliance on the encouraging numbers, particularly since February saw better results with $700 million raised and more deals sealed. March saw a massive decline to only $70 million despite having better prospects. The analysts suggest that while startups should prepare for a possible decline in June, the continent’s VC scene has been resilient.
African startups have continued to innovate and cater to the changing needs of customers and have been successful in securing funding despite the economic downturn. In 2022, African startups raised a total of $6.5 billion, and startups have remained resilient, with many creating new business models to boost the sector’s growth.
Africa has become the new frontier for tech investment, and predictions show that African startups will continue to attract funding in the coming years. The continent is now home to seven unicorns – Flutterwave, Jumia, Interswitch, Andela, Wave, Opay, and Chipper Cash, catering to the needs of the customers and addressing their pain points. These unicorns have made a significant impact across the continent and beyond, driving growth in the sector.
