Twenty (20) African African startups raised more than $11 million in funding in April 2023, which represented an improvement over the funding cycles seen since January 2023.
Forty-nine (49) startups raised more than $437 million in May, though several of them raised undisclosed sums during their various investment rounds.
The continent of Africa as a whole, including North, South, West, and East Africa, has a fair number of startups obtaining funding. Sadly, no startups from Central Africa were successful in raising funds in May.
Kenyan asset financing startup, M-Kopa, raised $250 million in May. Making it the startup with the highest raise in May.
The data of the May 2023 startup funding in Africa were determined by 2 key characteristics that TechEconomy tracks.
Fintech Dominates
According to analytics, in May 2022, fintech raised 44.8% of the $437,100,000 raised across 49 deals and led funding with 68.9% of total deals across 34 raises. Fintechs saw a 24.1% net increase, a significant difference given the industry’s potential to draw in even more money.
Nomba, a Nigerian provider of payment services, raised $30 million in a pre-Series B investment to aid African companies. Base 10 Partners in San Francisco, was the lead investor in the round, which also included Partech and Khosla Ventures, as well as new investors Helios Digital Ventures and Shopify.
Jia, a finance company built on the blockchain, has acquired $4.3 million in initial money to grow its operations in Kenya and the Philippines. It also got an additional $1 million for on-chain liquidity.
Sumitomo Corporation, a Japanese trading company, provided the $255 million (debt and equity finance) that the Kenyan asset financing fintech company needed to double its 3 million customers across all of its present markets and take advantage of opportunities in additional demographics. The fundraising also included participation from Blue Haven Initiative, Lightrock, Broadscale Group, and Latitude, Local Globe’s sister fund.
South African challenger Bank TymeBank raised $77.8 million in a pre-Series C deal headed by Swiss global impact investment firm Blue Earth Capital and African-focused growth-stage fund Norrsken22. Tencent, a major player in Chinese technology, also took part in this round.
To complete the May 2023 financing in Africa, several other fintech businesses in Kenya, Nigeria, South Africa, Egypt, Ghana, Uganda, and Cameroon raised respectable sums.
A Caveat
Fundraising in May 2023 expresses optimism. However, the dominant funds of M-KOPA ($255 million) and Tyme Bank ($77.8 million) in South Africa have a significant impact on these figures.
The M-o-M margin realized would not have been impressive without the two biggest deals, which together total $332.8 million in venture funding. Simply put, the fact that 76.13% of all venture capital in Africa came from just two rounds of fundraising indicates that the startup ecosystem’s funding is expanding unhealthily.
The fact that more money is being raised outside of the Big Four is a good thing to come out of Africa’s financing narrative for May. Fintech startup Nkwa from Cameroon raised $15k, b2b e-commerce Sabi raised $38m, and Kunda Kids raised $700k. Chari, DataPathology, and Prestafreedom, three Moroccan businesses, also received investment.
