Startup funding: Kenya is Africa’s most preferred destination in 2024

Kenya has emerged as the most preferred destination for venture funding in Africa in 2024. According to a report by African venture funding analytics company, Africa the Big Deal., startups in the East African country raised $638 million, representing 29 per cent of the total $2.2 billion raised on the continent in 2024.

Despite not having a new unicorn, Kenya’s successful run in 2024 was powered by large deals, mostly in the climate tech space. This includes d.light’s $176 million securitization facility in July, SunCulture’s oversubscribed $27.5 million series B funding round, and Basigo’s $44.5m series A funding targeted at delivering 1,000 e-buses across East Africa over the next three years.

Consequently, Kenya has emerged as Africa’s preferred startup investment destination for two consecutive years (2023 and 2024).

Nigeria, the continent’s long-time preferred venture funding destination, emerged a distant second, with startups in the country raising $410 million in the year under review. Nigeria’s total represents 18.6 per cent of the $2.2 billion raised on the continent in 2024.

Egypt followed closely behind Nigeria, with $400 million of the total $2.2 billion in funding raised by startups on the continent. This indicates an 18.2 per cent contribution by the largest tech market in North Africa.

Indeed, as of the end of the third quarter (September 2024), Nigeria was in third position behind Egypt, having attracted just 15 per cent of the $1.463 billion raised as of them. At the time, Kenya was in poll position, being responsible for an impressive 31 per cent of the total. This indicates that while Kenya had finished rather weaker, Nigeria finished stronger, powered by Moniepoint’s $110 million unicorn-making raise in October. This further indicates the possibility of a stronger 2025.

South Africa emerged as the last of the Big Four with tech startups in that market having raised $394 million, representing 17.9 per cent of the continental total. Despite finishing last, it must be noted that the South African market finished rather impressively because as of the end of the third quarter of 2024, the market had attracted only $125 million in venture funding.

For emphasis, South African startups raised a whopping 68.3 per cent of their total 2024 funding ($269 million) in only the fourth quarter of the year. This was of course driven by TymeBank’s $250 million raise in December which made it only the ninth unicorn minted in Africa with a $1.5 billion valuation.

Finishing with a 17.9 per cent average in 2024 means the South African market managed to finish closer to the average 18 per cent of total venture funding in Africa that it had attained between 2020 and 2023.

Africa’s Big 4 is responsible for 84% of Africa’s venture funding

While the in-competition among Africa’s largest markets, popularly known as the Big Four becomes stiffer with Kenya establishing itself as the first among equals, together, the four markets (Kenya, Nigeria, Egypt and South Africa) still maintain their squeeze on the venture funding dollars.

In 2024, all four countries combined are responsible for $1.842 billion in venture funding dollars that came into the continent. This represents a colossal 84 per cent of the total $2.2 billion tech startup investment into Africa, an average they have hovered around since 2019 when tracking began for startup venture funding.

It is also interesting that the success of any of the Big Four translates to the success of their respective regions. For example, following Kenya’s success, East Africa also emerged as the region with the highest funding numbers having attracted $725 million. This represents 33 per cent of the total in Africa and while it is an 18 per cent drop from 2023, it nonetheless means the region got 1 in every 3 dollars raised in Africa in 2024.

Kenya was the undisputed Big Brother of the region, having raised 88 per cent of the regional total. Tanzania came a very distant second, having raised $53 million, representing 7.3 per cent of the total. Uganda came in third, having raised $19 million, representing 2.6 per cent of the regional total. Rwanda, Sudan and Ethiopia also realized significant sums in funding.

Just like the West African regional giant, Nigeria, the West African region also emerged as the second-most invested space in Africa, having raised a total of $587 million in 2024 representing 27 per cent of Africa’s total. While this was a 3 per cent drop in yearly funding, it is, however, a massive improvement from 2023 when the region ranked fourth on the continent.

But Nigeria did not enjoy as great a majority as Kenya, Egypt and South Africa did in their regions as the market was responsible for nearly 70 per cent of the regional total. This made West Africa the most balanced region where the regional lead enjoyed the least percentage of total shares.

Behind Nigeria was Ghana which raised $68 million representing 11.6 per cent of the total. Benin Republic was not far behind having raised $50 million representing 8.5 per cent of the total. Cote d’Ivoire raised $33 million representing 5.6 per cent while Senegal raised $22 million representing 3.7 per cent of the total.

The North African region raised $478 million in funding, representing a massive 35 per cent drop in yearly funding and 22 per cent of the African total. Egypt, with $400 million, enjoyed the lion’s share of the regional total, accounting for 83.7 per cent of it. Morocco, with $70 million, raised 14.6 per cent of the total.

Tunisia and Algeria were jointly responsible for $8 million of the total.

The Southern African region made up the last of the pack, raising $397 million in funding, amounting to 18 per cent of the continental total. This also represented a 36 per cent yearly decline. South Africa alone was responsible for 99.2 per cent of the regional haul.

“There has historically been a lack of sizeable funding activity beyond South Africa in the region, which was even more extreme in 2024 when 99.4% of all regional funding went to the Rainbow Nation,” the report reads.

Only a handful of deals were recorded in Central Africa in 2024, for a total amount ($5m) more than 10x times lower than in 2023.