Nigerian startups attract least funding as Kenya dominates in Africa

In 2023, Nigerian startups attracted the least funding, among the Big Four in Africa, with Kenya ranking first place, a new report shows.

In its recent report, Africa: The Big Deal noted that the ‘Big Four’ attracted 87 percent of all the start-up funding in Africa, their largest share since 2019.

According to the report, Kenya attracted the most funding with $800 million raised in 2023, which is 28 percent of the continent’s total, Egypt raised $640 million, followed by South Africa with $600 million and Africa the most populous country acquired the least funding of $410 million.

The research platform disclosed that these startups that raised funding among the big four are home to 71 percent (357 out of 500) of the start-ups who raised $100k or more on the continent last year.

BusinessDay reported a 39 percent year-on-year decline, a total of $2.9 billion in 2023 compared to the $4.8 billion raised in 2022.

“Despite this downturn, the report highlighted that the results were better than anticipated, given the global slowdown in venture capital (VC) activity during the year,” it said.

However, the report disclosed that Nigeria is the country where the most dramatic change happened in 2023. While the country still claimed the highest number of start-ups to raise $100k or more (146, 29% of the continent), the amount they raised was divided by 3 YoY (-67%) to reach $410m, compared to $1.2b in 2022, and $1.7b in 2021. As a result, its share of Western African funding continued to drop to reach 68%, down from 85 percent in 2021, and 77 percent 2022.

“This is the lowest regional share of any Big Four market since we started collecting the data in 2019. Of course, even though it represents only 13 percent of the funding, there is a wealth of activity beyond the Big Four. Encouragingly, 29 percent of the start-ups that raised $100k or more in 20213 were located outside the Big Four,” it said.