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REPORT: Investment in African Startups Drops by More Than 50% Year-Over-Year to $780 Million in H1 2024

Between January and June 2024 (H1 2024), startups in Africa raised $780 million. This represents a 31% decrease from H2 2023 figures and an even more striking 57% reduction from H1 2023. Two thirds of this money came from stock, and the remaining third came from debt, according to data collated by Africa: the Big Deal.

Four out of every five dollars spent in African start-ups went to businesses owned by the Big Four. Although high, this is not the greatest percentage we’ve ever seen (92% in H1 2023). According to the study, Kenya received one-third of all the funding. “Transport and logistics garnered the highest amount of money (28%), with two of the three biggest acquisitions (Spiro and Move) disclosed in H1. Fintech maintained its lead in the number of startups raising $1 million or more over the time (30), despite coming in second in terms of total funds raised.

Only a small portion of investment, according to the Big Deal, went to start-ups created and run by women; 92% of funding went to businesses led by men, and 85% of the funding went to initiatives without a single female founder. The fall in startup investment is a continuation of the downward trend that was observed in 2023, when 547 deals totaling $3.5 billion were raised by African digital firms, a 46% decrease from the previous year [2022].

Furthermore, as the global economy contracts, Y-Combinator, one of the most alluring venture capital firms and accelerators for African businesses, has reduced its investments on the continent. The accelerator is accepting fewer firms from the continent for its twice-yearly programmes.

In the upcoming weeks, Max Cuvellier’s Big Deal newsletter will offer more in-depth analysis of the continent’s H1 statistics, including at a live event on July 23, 2024.

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