🌪️ 2023 🌪️ A tough year for everybody 🌪️

Africa suffered the strongest YoY drop in equity funding of all continents... but maintained the most positive 3-year dynamic

Previously on Africa: The Big Deal: in 2023, 7 investors signed at least a $100k+ deal a month on average, compared to 20 in 2022). Of this group, only two (Techstars & Catalyst Fund) recorded YoY growth in terms of # of deals signed.

⚡ 2023 ⚡ Top Investors of the Year ⚡

As we’ve seen in a previous post, equity funding in Africa fell -57% YoY last year. The question we’re asking today is: How was it for other regions? And the reason we’re using equity funding only in this instance, is to be able to compare apples to apples with our data for Africa on the one hand, and CB Insights’ State of Venture 2023 Report data (which focuses exclusively on equity funding) on the other hand, for the ‘rest of the world’.

Between 2020 and 2021 - at a time when equity funding had more than doubled YoY in every single region - it had more than quadrupled on the continent, the strongest performance of all. Between 2021 and 2022 things went sour all over, yet Africa had managed to hold better than its peers, with equity funding experiencing a limited drop of -5% YoY, while it recorded double-digit fall everywhere else (in Latin America, it was divided by ÷2.5 (-60%)). In 2023 though, Africa - alongside LatAm - suffered the biggest contraction as far as equity funding is concerned (over the same period, debt grew +47% YoY in Africa as we’ve seen), in a context that was pretty grim across the board.

In absolute terms, Africa continues to be severely underinvested, and represented less than 1% of all equity funding raised globally. North America, APAC and Europe bag tens of billions of dollars every year, and the only comparable region to Africa remains Latin America, which attracted twice as much funding as Africa in 2023, in line with 2022; the gap had been much bigger in the past though (4.7x times in 2021). With $1.9b of equity funding raised in 2023, Brazil alone is on par with the whole of the African continent ($1.7b). India in comparison, - demographically on the same level asAfrica - attracted over $7b last year.

What is more encouraging though, is to look at the longer-time trend, in which case Africa is holding up much better than its peers. Indeed, if we focus on how equity funding evolved between 2020 and 2023, Africa is one of only two regions - with Europe - to have experienced growth over the period: + 76% YoY, while Asia Pacific and LatAm contracted by -39% and -43% respectively.

Tomorrow Wednesday 17 Jan is our LinkedIn Live event during which we will bring all these graphs to life. I would encourage you to sign up, but at this stage I’m sure you have already. At least 1,600+ of you have ;)