Equity funding raised by Nigeria and other African countries has declined by 56 percent in the nine-month period of 2023, a new report by Africa The Big Deal shows.
The data released by the Africa tech research and data platform revealed that equity funding in 2023 declined significantly, dropping from $3.2 billion in 2022 to $1.4 billion over the nine-month period.
According to the report, “What is particularly pulling the numbers down is the fact that It has now been more than a quarter since the last $100m+ transaction was recorded and that there have been many fewer of those in 2023 so far compared to the previous two years.”
The data firm disclosed that September 2023 was the second-lowest month this year in terms of funding raised by start-ups on the continent. It stressed that the month was the second-lowest month for start-up funding in Africa since 2021.
The data further revealed that in September 2023, an African startup raised equity funding of $68 million compared to $182 million, $787 million, $108 million and $30 million reported in 2022, 2021 and 2020, respectively in the period under review.
Three standout transactions, consisting of a mix of equity and debt, accounted for 58 percent of all funding raised in September. South African firm Wetility secured approximately $48 million, SunCulture obtained $12 million in debt, and Zambia’s female-led Lupiya closed its Series A funding round with $8.25 million.
The report also highlighted the closure of Nigeria’s 54gene, which had previously secured $15 million in Series A funding in April 2020 and $25 million in Series B funding in September 2021.
Despite the overall decline in equity funding, Nigeria, South Africa, Egypt, and Kenya continue to dominate the investment landscape, collectively attracting a substantial 89 percent of all equity funding in Africa in 2023. This represents an even higher percentage than in the previous four years, solidifying their positions as the top investment destinations on the continent.
“The share of each Big Four market in the total funding raised in their respective region is also higher for each region compared to 2021 and 2022,” the report disclosed, underlining the sustained appeal of these nations to investors.