🍀 2023 🍀 Four pretty balanced blocks 🍀
East Africa snatches the crown while Western Africa tumbles off the podium
Previously, on Africa: The Big Deal: Start-ups in Africa have raised $2.9 billion in 2023 (-39% YoY), with 500 of them securing $100k or more. Many have turned to debt to finance their growth, as equity dipped -57% YoY. Full episode:
If we look at things from a regional point of view, 2023 has seen a rebalancing of start-up investments across the continent. While Eastern Africa comes out on top, the four key regions have attracted rather comparable amounts of funding last year, with a 1.5:1 ratio between the most and least attractive, compared to 2.7:1 in 2022 and 3.5:1 in 2021.
What happened in each region?
With nearly half a billion dollars raised by Sun King and M-Kopa alone, Eastern Africa attracted $880m in 2023, 31% of all the start-up investment on the continent. It therefore took the number one spot (up from #2 in 2022 and #4 in 2021), despite a -29% YoY slip, more moderate than some of its counterparts’. Debt represented more than half (56%) of the funding raised in the region and overall 130 start-ups raised $100k or more during the period.
For the first time, Northern Africa was the second-most attractive region on the continent. Start-ups there raised $670m (-39% YoY), including more than half a billion by MNT-Halan alone. And that’s not even including the value of the InstaDeep and Expensya exits ($500m+ combined); which means that if we were to include the value of exits, Northern Africa would actually be in the lead…
Next came Southern Africa, the only one of the four main regions to record moderate-yet-positive growth (+6% YoY). No start-up raised more than $100m in the region, and the 3 biggest raisers (Planet42, TymeBank and E4) only represented about a third of the total funding raised regionally (vs. 57% in Eastern Africa and 86% in Northern Africa).
The proportion was even lower in Western Africa (23%), which however claimed the largest number of ventures raising $100k+ (191, 39% of the continent’s total). With ‘only’ just over $600m in funding raised - 2.6x times less than in 2022! -, the region dropped from #1 to #4, by far its worth performance since we started tracking deals (it held the title in 2019, 2021 and 2022, barely missing it in 2020).
While being the only region to grow significantly (+33% YoY), from $51m in 2022 to $68m in 2023, Central Africa continues to represent a fraction of the total funding (2%), orders of magnitude smaller than its neighbours.
That’s it for today, but if you can’t wait for the rest of our analysis - or would like to complement it with your own - you can access our deals database here (or here actually, if you’d like a discount 😉). And if you haven’t already, don’t forget to sign up for our LinkedIn Live event on January 17. See you soon!
