African startups raised $3.2 billion in equity and debt funding in 2024, according to a report by venture capital firm Partech Africa.
The report titled: Africa Tech Venture Capital 2024, revealed that this represents a 7 percent drop from $3.49 billion reported the previous year. It said equity funding remained steady at $2.2 billion, matching the figures from 2023. However, debt financing declined significantly, dropping 17 percent to $1 billion.
“This growth is largely attributed to the increasing appetite for equity funding, as venture capitalists and private equity firms doubled down on their commitment to African markets,” a Lagos-based venture capitalist said.
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However, the report noted that the decrease in debt funding can be mainly attributed to rising interest rates and the strengthening of the U.S. dollar against African currencies. This put pressure on local currencies, raising the cost of loans in dollars and increasing repayment burdens for African startups.
Despite this setback, debt still accounted for 31 percent of the total funding raised by startups across the continent. The report also noted that activity in Africa’s tech ecosystem remained relatively stable, with 457 equity deals (down 3 percent) and 77 debt deals (up 4 percent).
Looking at equity funding by country, Nigeria led the pack with $520 million, followed by South Africa ($459 million), Egypt ($297 million), and Kenya ($221 million).
“These four countries, often referred to as the “Big Four,” continued to dominate equity funding on the continent, though their share was smaller compared to previous years—67 percent of the total in 2024, down from 79 percent in 2023 and 72 percent in 2022,” the report said.
Beyond the Big Four, only Ghana, Morocco, and Tanzania raised more than $50 million in equity in 2024. In terms of sectors, fintech remained the largest beneficiary of equity funding, receiving $1.3 billion, or 60 percent of the total. Other sectors attracting significant funding included cleantech (9 percent), e-commerce (7 percent), business services (7 percent), and agritech (4 percent).
When it comes to debt funding, Kenya led with $382 million, followed by Egypt ($142 million), South Africa ($132 million), and Ghana ($118 million).
As in previous years, cleantech captured the largest share of debt funding (40 percent), followed by fintech (34 percent) and connectivity-focused startups (11 percent).
The report also highlighted a 2 percent increase in the number of unique equity investors, reaching 583 in 2024. These investors were particularly active in seed-stage investments but less involved in Series A and B compared to previous years.
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In terms of average deal size, most stages of investment saw a decline, particularly Series A (down 18 percent) and Series B (down 27 percent). However, seed-stage investments showed positive growth, with average deal sizes increasing by 26 percent.
“Total funding amounts dropped across all stages of development, except for the Growth phase. Notably, megadeals (transactions over $100 million) saw an increase in both number (43 percent) and value (57 percent). In 2024, there were three megadeals in debt and four in equity, totalling $1.1 billion,” Partech added.
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