• Wednesday, May 29, 2024
businessday logo


Startups raise $75m in April as funding woes persist — Report

How bootstrapping can fuel startup success as VC fund slows

African startups raised $75 million in 25 deals in April, according to Africa: The Big Deal.

In a report titled, ‘Funding raised in April 2024,’ the data insight firm which tracks deals above $100k on the continent revealed that the funding raised in April was a 47 percent drop compared to the same month of 2023.

It noted that April’s raise was the second-lowest fundraising month since 2021, with the lowest being March 2023 at $69 million.

“There were only 25 deals $100k+ and over publicised last month, the slowest monthly activity in terms of deal numbers since we started to track $100k+ deals in 2021,” the data insight firm said.

Further analysis of the report revealed that African startups raised $542 million across 153 deals worth $100k+ from January to April.

“This is considerably less than in the past three years. Year-on-Year, it represents a 22 percent decrease in deal number and a 47 percent drop in deal value,” Africa: The Big Deal noted.

Eighty-five percent of these deals have gone to startups headquartered in one of the Big Four (30 percent to Nigeria and 29 percent to Kenya).

Regarding sectors, 28 percent of funding has gone to logistics and transport ventures, 25 percent to fintech, and 14 percent to energy. However, in terms of deal numbers, fintech continues to lead.

According to Africa: The Big Deal, two new exits occurred in April 2024. Ghanaian health tech Rivia acquired SaaS provider Waffle, and Kenyan transport tech BuuPass acquired QuickBus to accelerate their expansion to Nigeria and South Africa.

BusinessDay earlier reported that mergers allow companies to pool their strengths, whether it is complementary technologies, diverse talent pools, or enhanced research and development capabilities.

In April, two Series B funding rounds happened in Africa. Kenya-based SunCulture – which markets solar irrigation systems, raised $27.5 million, and Pula, a startup also based in Kenya, announced a $20 million round.

Max Giacomelli, head of Mobile for Development at GSMA and author of the report, said the overall numbers aren’t encouraging.

“Defiant optimism is a common trait of many entrepreneurs and investors on the continent, so it doesn’t hurt to look on the bright side of data sometimes while we hope for better numbers in the coming months,” he added.