Africa's 'big four' dominated VC funding in 2024Africa's 'big four' dominated VC funding in 2024

Africa's "big four" countries of Nigeria, South Africa, Egypt and Kenya once again raised the majority of venture capital (VC) funding in 2024.

The four countries raised 67% of all equity funding last year, but this was actually a drop from the 79% that the group raked in during 2023.

That's according to the Partech Africa Tech Venture Capital 2024 Report, which found that Nigeria had regained its position as Africa's top VC destination, driven by 11% year-on-year (YoY) growth in equity funding – raising $520 million – and boosted by a few megadeals, including Moniepoint's $110 million and Moove Africa's $100 million funding rounds.

South Africa was in second place, raising $459 million in equity last year, a 16% decrease compared to 2023 for a total of 67 deals, down 19% compared to 2023.

South Africa was home to one megadeal with Tyme Group's unicorn-making $250 million Series D funding round, saving this market from a drop of 69% compared to 2023.

Egypt, in third place, saw a 48% YoY increase in the number of deals made, but there was a 31% decline YoY in total equity funding for the country, to $297 million.

Kenya fell to fourth position, raising a total of $221 million in equity funding in 2024. This represented the largest YoY decline among the top four countries, with a 34% drop in funding.

Related:African startups raised $2.2B in 2024, 25% less than 2023

(Source: Partech Africa Tech Venture Capital 2024 Report)

"In 2024, with the exception of Nigeria, all of the top four markets experienced a decline in funding. However, in terms of deal number, Egypt stood out with a 48% increase in deal count, signaling a renewed energy in its VC ecosystem," said Tidjane Dème, general partner at Partech.

Of the 457 equity deals that Partech tracked in 2024, almost a quarter were made by Nigerian companies at 103, while Egypt had 89 deals, South Africa recorded 67 and Kenya had 59 deals.

Headquartered in Dakar, Senegal, Partech Africa is a VC fund that invests in technology startups in Africa. It is part of global tech investment firm Partech, which is headquartered in Paris.

Beyond the big four

Outside of the top four countries, Ghana, Morocco and Tanzania are the only other nations to surpass the $50 million equity funding threshold last year, Partech said.

In comparison, Ghana and Morocco were the only two markets in 2023 to achieve this, while there were five in 2022.

Ghana raised $102 million, reflecting a 36% YoY increase. In fact, Ghana has raised more than $50 million every year since 2019 and raised more than $100 million in four of the last six years.

Morocco raised $82 million in 2024, reflecting an 11% decline compared to the previous year, but it was still the second year the North African nation surpassed $50 million.

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Tanzania saw a major funding surge in 2024, raising $52 million in equity funding, a 1,150% increase compared to 2023. Partech said the extraordinary growth was largely attributed to Nala's $40 million funding round, which significantly boosted the country's overall total.

Funding flows in 2024

Partech recorded total VC funding of $3.2 billion in 2024, a 7% decline year-over-year.

Of this, $2.2 billion was in equity funding and another $1 billion in debt funding: a 2% and 17% decline respectively YoY.

"These numbers show stabilization after a steep drop in 2023 (-46% in funding, and -28% in activity). While the sector is not yet back on a growth trajectory, the African tech ecosystem is doing relatively well compared to other global market trends," the report's authors said.

The researchers said Africa performed relatively well in terms of VC activity despite ongoing challenges including currency devaluations, high interest rates and persistently high inflation.

The data showed a promising start in the first half of 2024, with Q1 and Q2 showing growth in the number of deals.

Momentum slowed in the latter half of the year with fewer deals, but a few megadeals in the fintech sector helped steady the market.

The final quarter of the year was boosted by major deals from Moniepoint and Tyme Group, giving both groups unicorn status with valuations of over $1 billion.

(Source: Partech Africa Tech Venture Capital 2024 Report)

Partech said it had witnessed a tightening of Series A and B deal flows, with many startups taking longer to raise capital, and an uptick in extension rounds.

"Conversion rates from Seed and Series A to later stages have decreased, compounded by a decline in Seed-stage activity over the last two years," the report said.

In 2024, the amount and volume of debt deals decreased, but debt still represented 31% of the total $3.2 billion, compared to 35% of the total in 2023.

Kenya, Egypt, South Africa and Ghana raised 77% of the debt funding.

Gender gap grows

In 2024, gender parity deteriorated as female-founded startups raised a smaller share of deals and funding compared to 2023. Partech's research shows that only 83 startups with female founders raised equity in 2024, representing 18% of total deal counts. These startups raised a total of $159 million, only 7% of overall equity funding.

"This decrease highlights ongoing challenges in securing funding for female founders. In 2024, male founders raised on average 13.2x the amount of VC funding compared to their female counterparts," the researchers said.

Ghana, Rwanda, Kenya and Cameroon led the way in terms of the percentage of female-founded startups closing deals: 41% in Ghana, 40% in Rwanda, 34% in Kenya and 33% in Cameroon.

Fintech remains a fixture

In 2024, fintech continued to dominate Africa's tech ecosystem, securing almost $1.4 billion, equivalent to 60% of total equity funding.

The sector garnered 131 deals, accounting for 29% of the transaction count. The fintech sector grew 16% year-over-year in deal counts and 59% year-over-year in total funding.

The next biggest sectors for equity investments were cleantech, e-commerce (including mobile commerce and social commerce) and enterprise tech.

(Source: Partech Africa Tech Venture Capital 2024 Report)

Fintech accounted for 72% of funding in Nigeria, 70% in South Africa, 60% in Egypt, and more than 70% of the funding in the rest of Africa.

Kenya was the only top-four country not driven by fintech companies (13% of equity funding) but rather by cleantech (46%) and agritech (15%).

(Source: Partech Africa Tech Venture Capital 2024 Report)

Resilience remains

"The African VC landscape remains resilient, mirroring trends in Global VC even though Africa has yet to experience the AI-driven surge that is driving 30% of the volume in global markets. In Africa, key sectors, particularly fintech, continue to power forward, demonstrating the strength and potential of the local ecosystem," Partech said.

The researchers believe investor confidence is on the rise, with increased participation, especially from local investors, and a growing spirit of collaboration.

Partech believes that, looking ahead, the data points to a backlog of startups at Seed and Series A stages, poised for the next level of growth. There are also a number of standout companies at Series B and beyond, maturing and preparing for global exits and consolidation.

"This leaves us with a demand for capital that is higher. The challenge is clear: overcoming the rising cost of capital, volatile macroeconomic trends, and liquidity constraints, and match this demand to unlock the full potential of Africa's tech ecosystem," the researchers added.