VCs invest $641 million in AI-enabled African startups

Investors invested $641 million in Artificial Intelligence (AI) enabled startups in Nigeria and other African countries between 2022 and 2023.

The African Private Capital Association (APCV) disclosed this. The body noted that investments in artificial intelligence firms have been on the rise in recent years.

“About 103 VC deals with a cumulative value of $641 million took place in African startups employing AI-related technologies between 2022 and 2023, indicating a vibrant and growing interest in the continent’s AI potential,” it said.

In a report, the association said AI, which is reshaping traditional industries, driving efficiency, and creating new opportunities for investments, has attracted the most venture capital raisers in recent years.

“AI, which encompasses automation, machine learning, and robotics, raised nearly $50 billion globally in 2023. In a year where $1 billion+ mega rounds were few and far between, companies leveraging AI were responsible for the year’s most substantial and talked-about venture capital fundraisers,” APCV said.

These fundraisers include the $10 billion multiyear investment in OpenAI, the $7.3 billion raised by Anthropic across five funding rounds, and Inflection AI’s $1.3 billion fundraiser, among others.

Findings by the body also revealed that investors have become increasingly interested in startups with AI in their business models.

“Startups incorporating artificial intelligence in their business models have also piqued the interest of investors in Africa. While not at the depth and breadth seen in more mature global tech ecosystems, the beginnings of investor confidence in the continent’s AI capabilities are now apparent,” it stated.

The body explained that startups are leveraging on AI technologies to leapfrog legacy infrastructure and revolutionise traditional sectors like finance, healthcare, and others.