Tuesday, August 29th, 2023 08:20 | By
Kenya overtakes Nigeria in value of startup funding
PHOTO/Courtesy
CAPITAL: Kenyan startups surged ahead of their Nigerian counterparts, capturing the limelight with an impressive $520 million (Sh46.46 billion) in startup equity capital in the first half of 2023.
Egypt closely follows with $510 million, while South Africa and Rwanda secured $400 million and $280 million respectively. This top-tier quartet signifies a powerful shift in the geography of startup funding.
According to data experts at Briter Bridges, a research and market intelligence firm dedicated to emerging markets, Nigeria secured $280 million (Sh40.65 billion) in funding, and ranked fifth on the continent in terms of funding volume.
Despite this, Nigerian startups hold an impressive seventh position globally, boasting an astonishing count of 101 deals—the highest on the continent. This statistical success underscores Nigeria’s bustling startup ecosystem. Kenya’s ascendancy is further underscored by the closure of over 80 deals. Meanwhile, South Africa sealed over 60 deals, Ghana secured more than 35 deals, and Egypt successfully concluded over 15 deals during the first half of 2023.
Challenging period
The initial half of 2023 has proven to be a challenging period for businesses and investors striving to secure capital, as indicated by the research. Africa witnessed a substantial decline in startup funding, plummeting to $1 billion from $1.5 billion in the latter half of 2022 and $1.8 billion in the first half of the same year.
This 26 per cent drop in funding volume from the second half of 2022 to the first half of 2023 reflects a shift in investor focus from growth-stage startups to ventures in the late and early stages. This shift has prompted some startups to close, while funders grapple with attaining desired closure rates.
