Cream always rises to the top, they say

Are the largest African countries in terms of economy and population also those attracting the most start-up funding?

In our extended 2024 analysis, we looked at the share of each of the Big Four in terms of start-up funding in Africa, compared to their relative weight in the continent’s population and economy. With this analysis, you can for instance see how much Kenya is punching above its weight, with 29% of the start-up funding in 2024 vs. ‘only’ roughly 4% of the continent’s nominal GDP and population. However, the downside of such an analysis is that the percentages tend to get small very quickly as the pie gets shared between 54 countries; so this week we’re comparing relative positions - ranks, if you like - to see what it tells us:

First, there is the story we kind of know already: that of the Big Four. With $4.6b of start-up funding raised since 2019, Nigeria (#1 funding / #1 population / #5 GDP) is sitting comfortably in the top spot, which is not surprising if we look at its population (#1) but actually is much better than its economic rank (#5), though this rank has been affected recently by the relative weakening of the naira, amongst other reasons. With $3.4b raised since 2019, the number 2 spot is taken by Kenya (#2 fund. / #7 pop. / #7 GDP) which is - as we said in the introduction - the prime example of a country overachieving. When we look at their GDP in particular, it is not surprising to find South Africa (#3 fund. / #6 pop. / #1 GDP) and Egypt (#4 fund. / #3 pop. / #2 GDP) consistently in the top 4 in terms of start-up funding raised. But things get more interesting as we move down the list…

Indeed, for both Ghana (#5 fund. / #14 pop. / #11 GDP) and Senegal (#6 fund. / #25 pop. / #18 GDP), the countries make it to the top 10 in terms of start-up funding since 2019 - and quite high on the list - despite not featuring in the top 10 when it comes to either population or nominal GDP. Tanzania (#7 fund. / #5 pop. / #10 GDP) and Uganda (#10 fund. / #9 pop. / #13 GDP) also rank higher on the funding board than on the GDP board. It is not the case though for Morocco (#8 fund. / #11 pop. / #6 GDP) and even more so for Algeria (#9 fund. / #10 pop. / #3 GDP), though they still make it to the top 10. Just off the start-up funding top 10 table are two markets which, similarly to Senegal, are ranking much higher than they do in terms of population or GDP: Tunisia (#11 fund. / #31 pop. / #15 GDP) and Benin (#12 fund. / #28 pop. / #25 GDP).

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The fact that some countries find their way into the top 10 in terms of start-up funding though not making the top 10 on demographic or economic grounds also means that others get left out. This is the case of Ethiopia (#16 fund. / #2 pop. / #4 GDP) for instance, which can be explained by the fact that the economy has opened up more recently compared to its peers. While being the fourth most populous country on the continent, DRC (#13 fund. / #4 pop. / #12 GDP) doesn’t make the top 10 in terms of funding, though its rank is actually very similar to its GDP rank. At #8 in terms of population, Sudan (#22 fund. / #8 pop. / #19 GDP) doesn’t make the top 20 in terms of start-up funding, but again ranks similarly to its GDP rank. Cote d’Ivoire (#14 fund. / #16 pop. / #9 GDP) in the GDP top 10 doesn’t make the start-up funding top 10, but isn’t too far down the list at #14. Angola (#12 pop. / #8 GDP) is the biggest anomaly, as it is the country that ranks the highest in both the GDP and population table, but where very little to no start-up funding activity has been recorded since 2019.

That’s it for today. As always, all the underlying data in terms of start-up funding can be found in our database, which you can access here at a discount. Don’t hesitate to let us know what you are doing with the data! Next week we’ll be looking at the February numbers. Until then, have a good one!