New data shows that fintech startups in Nigeria have outperformed other African startups in funding raised in the first six months of 2024.
The data by Afridigest, an African data and research platform, revealed that among the big four African countries, Nigerian led with the highest fintech funding of $140 million, followed by Kenya with ($97 million), Egypt with ($35 million) and South Africa with ($34 million).
It said, “Nigeria, Egypt, Kenya, and South Africa (NEKS) accounted for 90 percent of fintech funding. But they only accounted for 70 percent of deals. While investors increasingly explore beyond these core markets, they’re core for a reason — and they dominate big-ticket deals.”
Nigeria is known as a tech powerhouse in Africa, and recent data revealed its substantial lead over its African counterpart despite losing its top spot to Egypt the previous year, according to experts.
The report breakdown showed that Nigeria’s fintech startups raised $140 million through 24 deals monitored.
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“This is the highest number of deals reported in H1. Followed by Egypt with 10 deals, South Africa with 7 deals, and Kenya with 5 deals,” it said.
The report said countries recognised as the ‘little four’—Morocco, Uganda, Cameroon, and Tanzania—were not left out in funding and deals raised with fintech emerging markets, paving the way.
Overall fundraising in H1 witnessed a 70 percent decline to $340 million, down from $1.1 billion in H1 2023 and $1.5 billion in H1 2022. The authors of the report disclosed that equity funding for African fintech companies dropped 64 percent to $221 million in the first half of 2024, compared to $719 million reported the previous year.
“Debt financing also experienced a 75 percent decline to $119 million from $473 million,” they revealed.
This is an indication that venture capitalists and private equity firms, which have flocked to Africa, especially Nigeria, in recent years to take positions, are beginning to apply the brakes on investments. Experts say this reflects a global response to high volatility and inflationary forces in many economies, which are forcing investors to rethink their risk appetite, especially in the global tech ecosystem.
In Africa, investors are demanding a lot more from founders and tech companies before committing to fund their ideas. The funding raised among fintech startups includes entities within the banking/lending sector, which led the way, accounting for $0.54 of every dollar of equity raised and all debt raised in 2023.
The report said, “Payments was second as it’s been in years past. But in a new development, Insurtech claimed the #3 spot.”
“After years of multiple fintech mega-rounds in H1, only Nigeria’s Moove raised over $100M in H1 2024. There are probably a few more fintech mega-rounds to come over the next 12 months or so across the continent. Likely among them: the expected unicorn round of South Africa’s TymeBank,” it added.
