A total of $187 million in new fundraising was revealed by startups in Africa in May, indicating an improvement in funding from April. This is in line with a study from the organization “Africa: The Big Deal,” which tracks agreements made by African companies. According to the firm’s data, African businesses raised $75 million in April; therefore, the May figure indicates a 149% increase in investment for these startups.
According to the report, 17 businesses raised at least $1 million, while 64 initiatives earned at least $100,000 in funding—a relatively high number when compared to previous months. According to the research, 38 businesses raised at least $100,000 each month on average between January and May.
Grant, equity, and debt shares
The report also showed that 31% of the overall money, which was released last month, came from stock, 65% from debt, and 4% from grants. With the $51 million raised by M-KOPA and the $50 million by Spiro, the total debt funding for the month was $122 million.
Furthermore, three exits were reported in May: the much-discussed purchase of Brass by Paystack-led investors for an undisclosed sum; Lesaka’s acquisition of Adumo for $85 million; and Busbud’s acquisition of Ratality in South Africa.
Since the start of the year, $729 million in funding—exclusive of exits—has been revealed, according to the research firm.
The sum is still less than that of other times ($1.1 billion in the same period in 2021; $2.7 billion in January to March 2022; and $1.7 billion in January to March 2023). “However, in terms of number of ventures raising at least $1 million, 2024 so far compares rather well to some previous years: 90 vs. 95 in January to May 2023 and 91 in January to May 2021. 2022 was exceptional though with 200 ventures involved in $1 million+ deals in Jan-May,”.
Fundraising for Nigerian Startups in May
Moove, a Nigerian business, led African startup fundraising in the first quarter of this year. However, in May, there were just two significant deals for less than $7 million reported by Nigerian entrepreneurs, thus the scene was somewhat quiet.
These include the $1.9 million pre-seed round raised by logistics firm Renda and the $4.5 million raised by digital identification solutions business Seamfix. Renda raised money using a combination of loan and equity, whilst Seamfix received capital in the form of equity from the gender-lens investing fund Alitheia IDF.
Moove alone raised $24% of the entire capital raised by African entrepreneurs during Q1 of this year, having secured $110 million in total, including a $100 million Series B investment spearheaded by Uber. During that time, the startup in the continent raised $466 million in total funding.
