In a recent report by Africa: The Big Deal, the month of November proved to be a significant period for African startups, with a total of 32 companies securing a combined $180 million in funding. This achievement brings the total funding for 2024 close to $2 billion, showcasing a strong investment landscape for the continent’s entrepreneurial ecosystem.
The breakdown of the funding revealed that the majority of the funds raised in November came from debt financing, accounting for 68% of the total amount. Equity funding followed closely behind, making up 31% of the funds, while grants accounted for 1%. One of the standout deals of the month was the International Finance Corporation’s $80 million debt backing of Sun King in Nigeria, representing a substantial portion of the total funds raised.
Other notable transactions included Kenya-based internet service provider Mawingu securing $15 million in debt and equity to support its expansion across East Africa. Additionally, Ivorian fintech company Djamo raised $13 million in a Series B round, marking the seventh Series B deal of the year.
The funding landscape in November was largely dominated by startups in Kenya and Nigeria, which attracted 76% of the total funds raised during the month. This concentration of funding highlights the continued importance of these established hubs in attracting investment and supporting the growth of the startup ecosystem.
In addition to the funding achievements, November also saw some notable exits in the African startup scene. The acquisition of Egyptian construction tech company Elmawkaa by Saudi prop-tech firm Ayen, as well as the merger of energy-focused companies SteamaCo and Shyft Power Solutions, added to the dynamic nature of the ecosystem.
Looking at the overall funding trends for 2024, African startups have raised a total of $1.86 billion so far, with equity financing representing the majority of the funds raised. While there is optimism about surpassing the $2 billion mark by the end of the year, it is expected that the total funding will fall short of the $2.9 billion raised in 2023.
Reflecting on the third quarter of 2024, African startups secured over $600 million in funding, marking it as the best quarter of the year so far. This performance was largely driven by two major deals, highlighting the resilience and growth potential of the ecosystem.
Overall, the funding trends and developments of 2024 present a mixed picture for African startups, showcasing both opportunities and challenges. While there is a notable reliance on debt financing, startups are finding ways to secure capital without diluting their equity, enabling them to retain control over their businesses while accessing the resources needed for growth.
Addressing regional disparities and diversifying funding strategies will be key to unlocking the full potential of African startups and building a stronger, more inclusive ecosystem. Despite the challenges, African startups continue to demonstrate resilience and adaptability, positioning themselves for long-term success within an evolving funding environment.
