For the past 2.5 years, the global start-up sector has struggled with dwindling funding, but certain African nations are defying the trend.
In 2023, more money was raised in Kenya, South Africa, Morocco, Senegal, the Democratic Republic of the Congo, Rwanda, Ethiopia, and Zambia than in the previous year, according to the “African Startup Funding Report” published by industry service Disrupt Africa. Notable in particular is the renewed attention from a few large US tech companies.
For example, in a $100 million (Sh13 billion) funding round for Nigerian start-up Moove in the spring, mobility expert Uber emerged as the lead investor. Car purchases are financed by Moove using installment payments. Uber made its first investment in an African business with this one.
Additionally, this year, former Alphabet CEO Eric Schmidt and Netflix co-founder Reed Hastings supported Kenya’s SunCulture, which provides solar-powered water pumps.
Venture Capital
Over the previous two years, payment giants Visa and Mastercard have also invested several hundred million dollars in African technologies and ventures.
For the past four years, Jeff Bezos, the founder of Amazon, has made investments in Ghanaian fintech Chipper Cash through his own venture fund, Bezos Expeditions.
The startup scene in Africa is expanding. According to Max Cuvellier Giacomelli, co-founder of market intelligence platform The Big Deal, “US firms investing hundreds of millions in deals in Africa signals economic potential and confidence in market growth.”The business specializes in the start-up scene in Africa.
The difficult international economic climate that young businesses face has caused investments on the continent to fall by more than 60% in the first half of 2024. But Giacomelli observes a growing sector.
“More than a third of the investments in 2024 are loans. Three years ago, this figure was below ten percent,” explains the French native
This demonstrates confidence “that African start-ups can handle a broader range of investment instruments” and amply illustrates the maturity of the start-up ecosystem.
