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In four charts: How African startups raised $74M in January 2023

In January 2024, African tech startups secured $74 million across 24 deals comprised of both equity and debt, according to BD Funding Tracker.

In four charts: How African startups raised $74M in January 2023
Tech VC inflow into Africa. 🎨: Alex Tudun/Bendada.com

January typically sets a slow pace and may not accurately forecast the capital flow into the continent for the entire year. For instance, the fundraising in January last year constituted only 2.8% of the total funding by the end of 2023. Nonetheless, tracking these figures remains important to understand the market's early trends for the new year.

According to BD Funding Tracker, African tech startups raised $74 million in January 2024, across 24 deals made up of equity and debt.

Of this amount, equity funding accounted for 61.49% ($45.5 million with 20½ deals) of the total, while debt financing constituted 38.51% ($28.5 million with 3½). The equity funding experienced a decline of 20.18% compared to the amount raised in the same month last year.

*"½" denotes that Shamba Pride secured a $3.7 million debt-equity pre-Series A funding round, of which $1.7 million constituted equity investment.

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While our methodology did not previously include debt tracking, we have now added it due to its increasing prominence as an alternative funding source for startups on the continent, particularly in light of the funding winter.

Except for two startups—Sun King and Hatch Africa—which lack specific primary markets on the continent, Egypt, Kenya, South Africa and Nigeria maintained their positions as the top-funded markets in the African tech VC ecosystem.

These four markets accounted for 71.49% of the total amount raised in January. Egypt led in both deal value and number, followed by Kenya, South Africa, and Nigeria, with the latter having the second-highest deal number among them. Other markets that received funding in the first month of the year include Cote d'Ivoire, Morocco, and Senegal.

In terms of sectors, agritech emerged as the most funded startup in January 2024, with four deals securing $23.2 million—three of these deals were debt. Following agritech, healthtech, fintech, cleantech, and edtech were among the other most funded sectors, respectively. Additionally, African startups operating in HRTech, AI, logistics, mobility, communications, gaming, and e-commerce also raised funding.

Agritech, and Egypt, topped the charts of the most funded startups for the month, while cleantech and edtech also secured positions on the list. As previously noted, the majority of these deals are financed through debt.

In January, Orcas, an Egyptian edtech company, acquired Baims, a Kuwait-based edtech firm, to expand in the MENA region. Also, Tosin Osibodu, founder of Chaka, a Nigerian fintech startup acquired by Lagos-based Rise last year, exited the company last month after the deal was finalised.

According to experts, there will be an increase in mergers and acquisitions this year. "M&A will significantly expand as [big startups]... [look to] increase their market share. This will be a great trend because more M&A means there are exit opportunities for investors,"  Zachariah George, Managing Partner at Launch Africa Ventures, told Bendada.com.

This can manifest in two ways," Basil Moftah, General Partner at Nclude said. "Companies either closing their operations or being acquired by their competitors. This trend, particularly in the fintech sector, holds the promise of weeding out redundant ideas and driving greater scalability."

Related Article: We tracked over 26 African tech acquisitions in 2023

While we look forward to the rest of the year, we compiled a report on the State of VC Funding in Africa 2023 that provides insights and recommendations for investors and entreprenuers.

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