The amount of startup funding in August was comparable to what has come to represent the new standard for startup funding. A little over $23 billion has been invested each month on average so far in 2023, as active investors have slowed down their funding rate at every level.
In August 2023, the total amount of venture capital raised was $22 billion, an increase of about 19% monthly. Companies in transportation, particularly those with Chinese headquarters for electric vehicles, sustainability with EV battery companies, and biotechnology raised the most money last month.
Although generative AI businesses received some big funding, AI wasn’t the most important industry. Around $2.7 billion, or 13% of all venture capital funding, was given to AI businesses in August.
According to Crunchbase data, around $5 billion, or 23% of total venture capital funding, was raised by healthcare and biotech startups in August. $4 billion was raised in the mobility sector, with a significant portion going to Chinese electric vehicle manufacturers. Last month, financial services companies raised $2.8 billion.
How Does Africa Compare?
30 funding rounds of at least $100k were announced in August 2023: 23 were entirely equity-based, 2 were a combination of debt and equity, and 5 were debt-only.
Less than 1% of the global financing raised goes to Africa, which continues to have a small share of the global funding pie. This figure demonstrates that the startup ecosystem in Africa still has difficulty obtaining major capital on a global scale.
Overall, the declared value of equity and debt transactions in August totaled $244 million ($135 million in stock and $109 million in debt), an increase of +80% month over month but still much less than in August 2022 (-24%) and August 2021 (3).
LemFi’s $33 million Series A round, which was headed by Left Lane Capital, and Moove’s $28 million in new equity fundraising (which topped up $38 million in previously revealed equity investments and $10 million in debt) were the two largest equity transactions in August 2023.
Startups have raised $1.3 billion in equity capital so far this year. In 2022, they had accomplished this feat by February and had amassed $4 billion by August, when the funding winter had just begun. Given the current narrative, it is predicted that startup funding in Africa might fall under $2 billion in 2023.
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