2023 was an interesting year for African startups. According to ‘Africa: The Big Deal’, a tech research firm, the year saw rebalancing of investments across four of the continent’s largest tech markets; Egypt, Nigeria, Kenya, and South Africa.
For some time now, Nigeria has always received the biggest share of startup investments, however, in 2023, Kenya overtook the West African country, gaining the highest amount of tech funds on the continent.
The report notes that Kenyan startups raised a little under $800m to claim the top spot in Africa.
‘’With just under $800m raised in 2023, Kenya attracted the most funding, 28% of the continent’s total.’’ the report reads.
‘’While it suffered a decline (-25% YoY), its share of Eastern Africa’s funding grew from 86% in 2022 to 91% in 2023. 93 start-ups raised $100k or more during the period (19% of Africa’s total).’’ the report further reads.
Taking to his X page, Kenya’s president William Ruto attributed the increased funding to the country’s strategic reforms that have enhanced Kenya’s business environment.
‘’Proud that Kenya leads Africa in startup capital, securing an impressive $800 million (Ksh 124 billion) in 2023,’’ he said.
‘’Our strategic reforms have enhanced the business environment, positioning Kenya as the preferred choice for investors. This achievement reflects our commitment to fostering innovation and economic growth. The substantial funding is driving groundbreaking ideas, fueling technological advancements, and propelling job creation. ‘’ he added.
Nigerian startups recorded a significant drop in funding in 2023 with funding falling by 65.83 percent year-on-year to $410m in 2023 from $1.2bn in 2022.
‘’Nigeria is the country where the most dramatic change happened in 2023. While the country still claimed the highest number of startups to raise $100k or more (146, 29% of the continent), the amount they raised was divided by 3 YoY (-67%) to reach $410m, compared to $1.2b in 2022, and $1.7b in 2021. ‘’ the report says.
South Africa on the other hand was the only one of the big four to not see its total funding decrease between 2022 and 2023 (+8% YoY).
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