Kenya and Egypt top Nigeria as choice venture funding destinations in Africa in 2024

Kenya has emerged as the choicest destination for tech startup venture funding in Africa so far this year. This is according to a report by Africa-focused venture funding analytics company, Africa: the Big Deal.

According to the report, Kenya displaced Nigeria to earn the top spot, having attracted $437 million of nearly $1.463 billion raised by tech startups in the continent so far in 2024. This represents an impressive 31 per cent of the total tech startup venture funding attracted to the continent so far in the year.

Egypt has also emerged as the second most preferred destination for tech startup investments in 2024, with startups in the country raising $373 million. This represents an impressive 27 per cent of the total tech startup funding into the continent in nine months of 2024.

Kenya and Egypt together account for 58 per cent of total funding into the continent so far. For both of them, 2024 represents their highest-ever share of funding ever recorded since 2019. However, the year is yet to end which means things could yet change. But at the moment, both countries are enjoying an impressive run.

Talking about impressive runs, Nigeria is one market that would not feature in that conversation. The West African country, which used to be the first among the Big 4, has slumped in the pecking order, managing to attract only $218 million from January to September 2024.

The sum raised by startups in Nigeria represents a 15 per cent share of total venture funding raised on the continent so far. While this represents a very small improvement from the 14 per cent share the market attracted in 2023, it, however, remains a far cry from the average of 35 per cent the country used to enjoy in the years prior (2019 to 2022).

Nigeria and South Africa performing poorly in 2024 venture funding

Nigeria’s dismal run in 2024 is further buttressed by the third quarter venture funding numbers when the market was only able to raise $26 million during quarter. This was quite poor considering that startups in Egypt raised $272 million, representing 43 per cent of the total $600 million investment into the continent.

Startups in Kenya raised $201 million, representing 32 per cent of the total and indicating that three-quarters of the funding raised in Africa between July and September went to Egypt and Kenya alone. Next was Tanzania which attracted $43 million.

Indeed, of the six markets that attracted $10 million or more in funding during the period, Nigeria represented the least as tech startups in both South Africa and Ghana attracted more, raising $40 million and $35 million respectively.

The second of the underperforming pair is South Africa as startups in that market have attracted $125 million in venture funding in 2024 so far. This represents a paltry 9 per cent of the total funding into the continent as well as its worst performance in terms of its share of continental funding since 2019 when it accounted for just 6 per cent of Africa’s total. The market has averaged 18 per cent of total venture funding between 2020 and 2023.

In sum, the Big 4 tech ecosystems in Africa are responsible for 82 per cent of the total venture funding into the continent while the rest of Africa shared 18%. 23 markets across the continent have recorded at least one $100k+ deal since January 1st and only five of them have recorded at least 10 such deals since the beginning of the year. They include Tanzania, Ghana, Morocco, Uganda and Rwanda.

In the context of gender, male-led startups have continued to dominate the African venture funding space as $1.4 billion of the total $1.463 billion went to tech startups with a male CEO. This represents more than 95 per cent of the total funding.

Startups with female CEOs only got $63 million, representing less than 5 per cent of the total, a marked reduction from the average of 5.6 per cent average between 2019 and 2023. The reality is even worse when considering that less than 1 per cent of the total funding went to startups founded only by women, a significant drop from the 2.1 per cent average between 2019 and 2023.

Furthermore, only 9 per cent of the total African venture funding went to founding teams with at least one woman, a sharp drop from the 17 per cent it used to be between 2019 and 2023.

See also: Startup funding: African startups raised $600m in Q3, a steep rise despite global slump