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Total investment in Africa’s high-tech startup ecosystem fell by 27.8% to USD 2.4 billion in 2023, as the effects of the global capital shortage began to be felt on the continent.
This is according to the 9th edition of the annual report. African Tech Startup Funding Report Released from Startup News and Research Portal destroy africaIt’s available for free to everyone as part of an open source initiative in partnership with . Flourish Ventures, AAIC investmentand Atlantica Ventures.
While Africa’s technology industry has made impressive gains against global trends, with total funding exceeding US$3 billion in 2022 for the first time on record, 2023 represented a reset of sorts. A total of 406 startups raised a total of USD 2.4 billion during the year.
Although it is still the third best year on record for the number of ventures funded and the second best year for total capital secured, this represents a significant decrease compared to 2022. The number of funded ventures decreased by 35.9% compared to 633 companies that raised in 2022. Total USD 2.4 billion decreased by 27.8%. Furthermore, the number of active investors has decreased by almost 50% and M&A activity has also decreased significantly.
It is the first time since 2016 that the sector, which has expanded so rapidly in recent years, has declined, but the drop in funding by less than a third is the same as expected in early 2023 (50% per year). This is an improvement from the decline in the US dollar. It was thought that there was a high possibility that the cent. Africa, like the rest of the world, has been affected by a global ‘funding winter’, with venture capital drying up and some leading start-ups forced to shut down or significantly restructure their operations. has been done.
Nigeria, Egypt, South Africa and Kenya are Africa’s ‘big four’ in terms of funding, with a larger share of total funding secured in 2022. However, funding in Nigeria declined significantly, by 59 percent, slightly below the United States. 400 million dollars. This moved it to fourth place overall behind Kenya, Egypt and South Africa, although some startups still received more funding than any other market. The startup secured capital in 22 other countries.
The fintech sector remained the most attractive for investors in 2022, with more startups securing funding than any other sector and dwarfing any other sector in total. However, like most other sectors, investment fell significantly, falling by 33.4% to USD 964 million.
The report can be downloaded for free here. The annual report not only provides a complete list of funded startups, who invested and, if possible, the amount raised in the previous year, but also provides information on investment trends within major startup geographies and industries. It is explained in detail. Data on acquisitions of African startups.
“On the face of it, from a funding perspective, 2023 was a really bad year for the African tech industry. The funding difficulties quantified in this report are borne out by events on the ground, and Stage companies are struggling and some have even failed” – to survive this “funding winter”. But remember that this is not a phenomenon unique to Africa, but rather a result of global headwinds, and that the numbers are not as bad as we thought they would come back at the end of Q1 or Q2. must not be ” said Gabriella Mulligan, co-founder of Disrupt Africa.
Tom Jackson, co-founder of Disrupt Africa, said “winter” will soon “give way to spring” and investment is bound to pick up again over the next 12-18 months, but will not reach 2022 levels anytime soon. He said it would not be achieved.
“Technology in Africa is still in its infancy and there is plenty of room for growth, but even a relatively bad year from a funding perspective will not change that. is adapting to this ‘new normal’ by charting a path to more sustainable growth while ensuring proper governance is embedded within organizational structures. “Funds are being raised, capital is being spent, and 2023 should prove to be just another jump on the growth curve for the best venture companies, and for the entire ecosystem.”
Previously sold African Tech Startup Funding Report was previously purchased annually by major African and global technology companies, Big Four consulting firms, banking and fintech leaders, venture capital firms, supranational investors and international trade organizations. But now, Disrupt Africa is making this publication free and accessible to the people for whom the information is most valuable: African entrepreneurs.
This year we will do this with the help of our partners. Flourish Ventures, AAIC investmentand Atlantica Ventureswith support from Disrupt Africa. African Tech Startup Funding Report 2023 To as many ecosystem stakeholders as possible.
“As long-term supporters of African founders, we are optimistic about the future of the continent’s technology ecosystem and are particularly encouraged by its performance during a globally challenging year. In partnership with Disrupt Africa, the 2023 edition of African Tech Startup Funding Report to all stakeholders,” said Ameya Upadhyay, venture partner at Flourish Ventures.
“Continuous communication is essential to the sustainable growth of Africa’s startup ecosystem. We are pleased to contribute to Disrupt Africa’s efforts aimed at fostering long-term development. ” said Hiroki Ishida, Principal (Africa) at AAIC Investments.
“We are pleased to partner with Disrupt Africa on the 2023 Startup Funding Report,” said Aniko Szigetvari, founding partner at Atlantica Ventures. “This is an important source of insight and funding trends.”
For more information or Download the reportPlease come disruptafrica.com/funding-reportor email Gabriella [email protected]or tom on [email protected].
About Disrupt Africa
destroy africa is your one-stop destination for all news, information and commentary on the continent’s technology startup and investment ecosystem. With journalists roaming the continent to find, meet and interview the most innovative and disruptive technology startups, Disrupt Africa is a true showcase of Africa’s most promising businesses and business ideas. Its research arm releases detailed reports on various aspects of Africa’s technology startup ecosystem.detail here.
About Flourish Ventures
prosper is an evergreen fund that invests in entrepreneurs who help people achieve financial health and prosperity through innovation. Flourish manages $850 million in patient capital and invests in fintech startups that advance the financial health and prosperity of individuals and small businesses. Flourish’s global portfolio of more than 70 companies with presence on five continents includes high-growth companies such as Alloy, Chime, Fair Money, and Flutterwave. Flourish works with industry thought leaders, policymakers, and regulators to better understand the needs of underserved populations and develop systems to foster a fairer and more inclusive economy. We are working to create positive change. Flourish, founded in 2019, Omidyar Group The company is headquartered in Silicon Valley, California, with offices in Washington, DC, Bangalore, Nairobi, and London.
About AAIC Investment
AAIC investment We aim to invest in rapidly expanding companies in Africa’s healthcare and technology sectors. Our primary focus is to provide growth capital and long-term value to help companies improve performance and accelerate expansion. We launched his second fund in 2022, bringing his total commitments to $87 million, including over 45 of his investments. AAIC has offices in Singapore, Kenya, Nigeria and South Africa.
About Atlantica Ventures
Atlantica Ventures is a pan-African venture capital firm specializing in early stage investments across the African continent. We are focused on supporting founders who leverage innovation to drive big change and drive long-term value and social impact. Comprised of professionals with diverse technology, investment, and operational expertise, we invest in ventures from pre-seed to Series B rounds. With offices in Lagos and Nairobi, we are expanding our reach into the New York and San Francisco Bay Areas through strategic partnerships.
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