May (not meh)

Investments bounce back in May. Climate and debt financing confirm their trajectory.

With $187m of fresh funding announced by start-ups in Africa, May 2024 marked a serious rebound compared to what was - let’s say it - a pretty bad month of April ($75m), making it the second-highest month in terms of fundraising in the past 6-month period. 64 ventures received at least $100k in funding, a very high number compared to previous months (38 a month on average between January and April); 17 of them raised at least $1m. The overall number is however inflated by the 40 ~$100k grants announced in May, including 12 from CcHUB and 12 from iHub as part of the Mastercard Foundation EdTech Fellowship. The total funding announced last month was split between 4% in grants, 31% in equity, and 65% in debt ($122m, including $51m for M-KOPA and $50m for Spiro). In addition, 3 exits made the news in May: Lesaka’s acquisition of Adumo for $85m, Busbud’s acquisition of Ratality in South Africa, and the much-discussed takeover of Brass by Paystack & friends.

As numbers can fluctuate quite heavily on a monthly basis, it is more significant to compare numbers over longer periods, for instance 2024 ‘year to date’ to previous comparable periods (Jan-May, ‘J-M’), to account for seasonality. Since the beginning of the year, $729m have been announced in funding (excluding exits), a total still lagging behind previous periods: $1.7b in J-M 2023, $2.7b in J-M 2022 and $1.1b in J-M 2021. However, in terms of number of ventures raising at least $1m, 2024 so far compares rather well to some previous years: 90 vs. 95 in J-M 2023 and 91 in J-M 2021 (2022 was exceptional though with 200 ventures involved in $1m+ deals in Jan-May).

At least two of the previous trends we’d identified seem to be confirming themselves: The share of funding going to climate-related ventures continues to raise: from 19% in Jan-May 2021, it grew to 23% in J-M 2022, 32% in J-M 2023, and so far in 2024 represents 44% of all the funding announced (exc. exits). The weight of debt financing is also confirmed by the latest numbers: it represented 35% of all funding announced in Jan-May 2024, in line with the previous period (38% in J-M 2023), and in stark contrast with the previous years (between 4% and 8% for comparable periods in 2019-2022).

Sorry the monthly analysis is coming out a little later than usual, but I’d not quite anticipated how busy things would be coming back from a real 2-week break (#VisitApulia). But of course if you subscribe to our database, you’ve received the updated raw data from Maxime on the first day of the month as always. What, you’re not a subscriber yet? You can easily right this wrong here :)… Hasta luego, Max