Africa’s Venture Capital Landscape in 2024: A Deep Dive into the "Big Four"

In 2024, Africa’s venture capital scene once again showcased the dominance of its "big four" countries: Nigeria, South Africa, Egypt, and Kenya. Together, these nations raised a staggering 67% of all equity funding on the continent, although this figure marks a decline from the 79% share they captured in 2023. This shift highlights the evolving dynamics of venture capital in Africa, as new players and trends emerge.

Nigeria: The Resilient Leader

Nigeria has reclaimed its title as Africa’s top destination for venture capital, driven by an impressive 11% year-on-year growth in equity funding. The country raised $520 million in 2024, bolstered by significant megadeals, including Moniepoint’s $110 million and Moove Africa’s $100 million funding rounds. These substantial investments underscore Nigeria’s robust fintech ecosystem, which continues to attract both local and international investors.

South Africa: A Mixed Bag

In second place, South Africa raised $459 million in equity funding, reflecting a 16% decrease from the previous year. The country recorded 67 deals, a drop of 19% compared to 2023. However, South Africa’s venture capital landscape was buoyed by a standout megadeal: Tyme Group’s $250 million Series D funding round, which propelled the company into unicorn status. This deal was crucial in mitigating a potential 69% decline in funding, illustrating the importance of high-value investments in stabilizing the market.

Egypt: Growth in Deals, Decline in Funding

Egypt secured third place, witnessing a remarkable 48% increase in the number of deals made. However, the total equity funding for the country fell by 31% year-on-year, totaling $297 million. This paradox of increased deal activity alongside declining funding highlights a shifting landscape where more startups are entering the fray, but the overall investment amounts are not keeping pace.

Kenya: The Struggler

Kenya, once a strong contender in the venture capital arena, fell to fourth position in 2024, raising only $221 million. This represented the most significant year-on-year decline among the top four countries, with a staggering 34% drop in funding. The challenges facing Kenya’s startup ecosystem are evident, as it grapples with a need for revitalization and renewed investor interest.

Beyond the Big Four: Emerging Markets

While the big four dominate the funding landscape, other countries are beginning to make their mark. Ghana, Morocco, and Tanzania surpassed the $50 million equity funding threshold in 2024. Ghana raised $102 million, reflecting a 36% year-on-year increase, while Morocco secured $82 million, despite an 11% decline. Tanzania, however, experienced a remarkable surge, raising $52 million—a 1,150% increase from the previous year, largely attributed to Nala’s $40 million funding round.

Overall Funding Trends in 2024

According to the Partech Africa Tech Venture Capital 2024 Report, total VC funding in Africa reached $3.2 billion, marking a 7% decline year-on-year. This total comprises $2.2 billion in equity funding and $1 billion in debt funding, reflecting declines of 2% and 17%, respectively. Despite these figures, the report indicates a stabilization in the market following a steep drop in 2023, suggesting that the African tech ecosystem is faring relatively well compared to global trends.

Gender Disparities in Funding

A concerning trend emerged in 2024 regarding gender parity in venture capital. Female-founded startups raised only 7% of overall equity funding, with just 83 startups securing deals. This highlights ongoing challenges for female entrepreneurs in accessing capital. In contrast, male founders raised an average of 13.2 times more funding than their female counterparts, underscoring the need for increased support and investment in women-led ventures.

Fintech: The Dominant Sector

Fintech continues to be the powerhouse of Africa’s tech ecosystem, securing nearly $1.4 billion—60% of total equity funding. The sector experienced a 16% year-on-year growth in deal counts and a remarkable 59% increase in total funding. Other notable sectors include cleantech, e-commerce, and enterprise tech, but fintech remains the clear leader, particularly in Nigeria, South Africa, and Egypt.

Resilience Amid Challenges

Despite facing challenges such as currency devaluations, high interest rates, and inflation, the African VC landscape demonstrates resilience. The report indicates that investor confidence is gradually rising, with increased participation from local investors and a spirit of collaboration emerging within the ecosystem. While the market is not yet on a growth trajectory, the data suggests a backlog of startups at the Seed and Series A stages, poised for growth.

Looking Ahead

As the African tech ecosystem continues to evolve, the demand for capital remains high. However, challenges such as rising costs, volatile macroeconomic trends, and liquidity constraints persist. The future will require innovative solutions to unlock the full potential of Africa’s burgeoning tech landscape, ensuring that it remains a vibrant hub for investment and innovation.