After a sluggish January, African startups witnessed a welcome surge in funding during February 2024.
Compared to the previous month’s $77 million, the total startup funding in February reached nearly $217 million, marking almost a threefold increase according to Africa: The Big Deal’s report
This positive development, however, comes with the caveat that funding still falls short of figures observed in the same period during the past four years.
Despite the lower overall funding compared to previous years, several positive indicators suggest a potential rebound for the rest of 2024.
Notably, the number of startups securing at least $1 million in funding remained healthy, with 38 companies achieving this success in the first two months. This figure indicates a continued flow of investment, albeit at a slightly more cautious pace.
Taking a closer look at the geographical distribution of the funding reveals that Nigeria and Kenya emerged as the frontrunners, collectively attracting 86% of the total investment. This dominance shows the continued prominence of these established startup hubs within the African sector.
An analysis of the sectors attracting the most funding sheds light on the growing investment trends. Interestingly, the Logistics & Transport sector topped the chart, with a huge portion of this investment attributed to the Nigerian transportation technology company, Moove.
Moove made headlines by securing $10 million in debt financing reserved for its expansion into India. Nonetheless, recent whispers of an impending Series B round have gone around the industry, with insider confirmations corroborating the rumors.
This trend shows the growing importance of efficient logistics infrastructure in facilitating Africa’s economic development.
Additionally, startup funding in February witnessed three notable exits, highlighting the dynamism and maturation of Africa’s startup industry.
Carbon’s acquisition of Vella Finance, Auto24’s purchase of Kupatana, and FairMoney’s potential acquisition of Umba showed a sector ripe with consolidation and strategic manoeuvring.
A retrospective glance at the year-to-date figures for 2024 shows a promising growth direction, with startups raking in nearly $300 million in funding. Of the 80 startups that secured funding, 38 crossed the million-dollar threshold, accentuating the resilience and growth potential of African ventures.
Following closely behind Logistics & Transport were the Healthcare and Fintech sectors, both of which secured notable investments in February. This continued interest in these sectors points to the potential for significant growth and societal impact in the African context.
While the overall funding for the first two months of 2024 remains lower compared to previous years, the considerable growth observed in February brings a reason for cautious optimism.
It is important to acknowledge that predicting the total funding for the entire year remains challenging. However, based on historical trends and the positive momentum witnessed in February, estimates suggest a potential range of $1.4 billion to $3.2 billion for 2024.
Ultimately, the actual figure will depend on various factors, including the potential emergence of mega-deals in the coming months.
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