Despite a slowdown in funding for African startups in 2024, there are signs of underlying growth and promise, particularly in Egypt. Data from the “Africa: The Big Deal” report reveals a significant decrease in funding compared to the previous year, with an 84.8% drop in headline figures. However, excluding a single large acquisition in 2023, the decrease is more moderate at 16.2%, indicating a relatively stable tech ecosystem in Africa amidst the global funding slowdown.
In January 2024, the sectors that attracted the most investment were agritech, cleantech, and health tech. However, fintech and other sectors experienced a decline in funding, reflecting a global trend of investors favoring established startups with proven track records during uncertain economic times.
Notably, three out of the four logistics startups that secured funding in January were from North Africa, specifically Egypt. This aligns with the success of Egyptian mobility startup Swvl, which achieved profitability in 2023 after years of losses. These developments indicate that Egypt’s logistics sector may witness increased investor interest in the upcoming year.
Despite the funding challenges, both new and established investors have demonstrated their commitment to the African tech ecosystem. The European Investment Bank (EIB) invested $30 million in Seedstars, focusing on francophone Africa, while the African Development Bank (AfDB) provided an additional $10.5 million. Moreover, influential figures like Iyin Aboyeji and Mia von Koschitzky-Kimani launched Accelerate Africa, a Nigerian accelerator aimed at supporting early-stage startups.
Egypt also saw the emergence of T-vencubator, a hybrid venture capital firm, and incubator that aims to invest in promising Egyptian talent. This unique model could provide valuable support for early-stage startups in the country, further bolstering Egypt’s position in the startup ecosystem.
While African startups face a funding chill in 2024, the underlying growth and potential remain intact. Egypt, in particular, demonstrates signs of promise, attracting investor attention in sectors such as logistics and establishing support structures to nurture budding entrepreneurs.
