🍰 2023 🍰 Big Four domination. Yes, but... 🍰

Big Four's share of total funding at its highest since 2019, with Nigeria's situation at odds with its peers'

Previously, on Africa: The Big Deal: 2023 saw a rebalancing of investments across the four main regions. Serious YoY decline in West Africa (-62%) bumped it off the podium altogether, while East Africa took the crown. Full episode:

🍀 2023 🍀 Four pretty balanced blocks 🍀

In 2023, the ‘Big Four’ attracted 87% of all the start-up funding in Africa, their largest share since 2019. They were home to 71% (357 out of 500) of the start-ups who raised $100k or more on the continent last year. Given their weight, their ranking pretty much mirrors the regional one, with Nigeria’s story quite different from the others’. Let’s have a closer look:

🇰🇪 With just under $800m raised in 2023, Kenya attracted the most funding, 28% of the continent’s total. While it suffered a decline (-25% YoY), its share of Eastern Africa’s funding grew from 86% in 2022 to 91% in 2023. 93 start-ups raised $100k or more during the period (19% of Africa’s total).

🇪🇬 In Egypt, there were 48 such ventures raising $100k+ in 2023, the lowest number out of the Big Four. But thanks to a YoY decline (-20%) more moderate than Kenya and most importantly Nigeria, it was enough for the country to claim the second spot. Egypt’s share of North African funding grew substantially from 72% in 2022 to 95% in 2023 (+23pp, by far the strongest progression), due both to the magnitude of MNT-Halan’s fundraising, and Algeria and Tunisia’s inability to repeat their strong 2022 performance.

🇿🇦 South Africa’s share of regional funding remains the highest at 97%. The 70 start-ups who raised $100k or more in the country cumulated $600m in funding i.e. 21% of the continent’s total. South Africa was the only one of the Big Four not to see its total funding shrink between 2022 and 2023 (+8% YoY).

🇳🇬 Finally, Nigeria is the country where the most dramatic change happened in 2023. While the country still claimed the highest number of start-ups to raise $100k or more (146, 29% of the continent), the amount they raised was divided by 3 YoY (-67%) to reach $410m, compared to $1.2b in 2022, and $1.7b in 2021. As a result, its share of Western African funding continued to drop to reach 68%, down from 85% in 2021, and 77% in 2022. This is the lowest regional share of any Big Four market since we started collecting the data in 2019.

Of course, even though it represents only 13% of the funding, there is a wealth of activity beyond the Big Four. Encouragingly, 29% of the start-ups who raised $100k or more in 20213 were located outside the Big Four…

But that’s for another post! If you’re hungry for more - or love to play with data as much as I do - remember you faithful readers get access to our comprehensive deals database at a discount but using this link. If you’re not one of the 1,200+ people who have already, feel free to register for our free LinkedIn Live event on January 17. See you! Max