Partech, the global technology investment firm, has released its annual 2024 Africa Tech Venture Capital report.
The report, shared with BitKE by the Partech team, provides a comprehensive, in-depth analysis of the evolution of the Africa Tech VC ecosystem in 2024, including fully disclosed, partially disclosed, and confidential deals. The African tech sector attracted only 7% less capital than in 2023, demonstrating resilience and securing US$3.2B in funding (equity and debt combined).
Positive trends, such as increased investor participation and the rise of megadeals, are tempered by challenges including a slowdown in Series A and B deal flow, longer fundraising timelines, and a rise in extension rounds.
Key report takeaways:
- African startups raised $3.2 billion in 2024 in equity and debt funding showing resilience; Equity funding amounts remain stable at $2.2 billion while debt dropped 17% to $1 billion.
- Activity is also stable with 457 equity deals (-3%) and 77 debt deals (+4%).
- Investors’ confidence is on the rise, up 2% in unique equity investors at 583 (after a steep decline the prior year).
- Nigeria regained its leadership in both total equity amounts ($520 million) and equity deal count (103) while Egypt saw the fastest growing activity (+48% YoY) in equity deals. Kenya led the way on debt, with 38% of the total debt funding and 31% of the total deal count.
- Fintech continues to stand out, attracting 60% of the total equity funding. Fintech is the only sector that grew both in equity deal count (+16%) and funding (+59%), notably thanks to 4 equity megadeals this year.
- Debt is still an important part of capital at 31%, a small decline from 35% last year.
“After the first two quarters showed growth in deal count for the first time since the downturn, the momentum shifted in Q3 and Q4 even though a few Fintech megadeals helped steady the market” explains Cyril Collon, General Partner at Partech.
“The African VC ecosystem remains resilient, mirroring the global VC market, but, interestingly, without benefitting (for now) from the AI-driven boost accounting now for 30% of the global VC funding. It’s driven by key sectors, particularly fintech, which continue to power forward, demonstrating the strength of the ecosystem and its foundational sectors .”
The African tech ecosystem saw a slight increase in active equity investors, marking a strong contrast to the previous year’s trend which saw the investor count drop by 50%. However, the 2024 investors were more active at Seed+ stage and less involved at Venture stage, compared to previous years.
The report highlights an overall stabilization in terms of deal activity. While the number of deals has decreased across most stages, except for Series A, this decline is quite limited compared to 2023. In terms of ticket sizes, the African VC landscape saw a decline across most investment stages, particularly in:
- Series A (-18%) and
- Series B (-27%).
- Seed stage, however, performed better, with ticket size growing 26%.
- Total funding amounts decreased across all stages except for Growth.
Nigeria, South Africa, Egypt, and Kenya continued to dominate the market but to a lesser extent (67% of 2024 total vs. 79% in 2023). Nigeria reclaimed its position as Africa’s top VC investment destination in 2024, leading in both equity funding and deal count. The country secured US$520 million in equity funding (+11% YoY), driven by notable high-value deals. Interestingly, even without these megadeals, Nigeria would still have retained its top spot in VC investment.
South Africa raised US$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 that saved the market from a drop of 69% compared to 2023.
“In 2024, with the exception of Nigeria, all of the top 4 markets experienced a decline in funding”, comments Tidjane Dème, General Partner at Partech.
“However, in terms of deal number, Egypt stood out with a 48% increase in deal count, signaling a renewed energy in its VC ecosystem.”
Outside of the top 4 countries, Ghana, Morocco, and Tanzania are the only other countries to surpass the $50 million equity funding threshold.
Francophone African countries now account for 55% of the total equity funding volume within the broader rest of Africa group, underscoring their continued appeal outside of the top four. However, this represents a significant decline from their 68% share of total funding of rest of Africa in 2023.
Fintech continued to dominate Africa’s tech ecosystem, securing $1.3 billion, equivalent to 60% of total equity funding. The sector garnered 131 deals, accounting for 29% of the transaction count. Fintech is growing 16% YoY in deal count and 59% YoY in total funding, making it an active and growing ecosystem on its own.
In 2024, gender parity deteriorated as female-founded startups raised a smaller share of deals (18%), as well as funding (7%), compared to 2023. Agritech was an outlier: it showed the most progress and reached gender parity in terms of funding.
Lastly, while the amount and volume of debt deals decreased, debt still represented 31% of the total $3.2 billion (vs. 35% in 2023), confirming the growing access to debt capital in Africa. However, access to debt still comes with significant constraints. Most of the available debt remained labelled in USD with high interest rates, and a comprehensive transformation of the offer is yet to happen to meet the unique requirements of African startups.
Here are key things to note from the report:
Equity funding held steady at $2.2 billion, while debt financing fell 17% to $1 billion. Deal activity showed slight changes, with
- 457 equity deals (-3%), and
- 77 debt deals (+4%)
Investor confidence improved, as the number of unique equity investors rose by 2% to 583, reversing the steep decline seen in 2023.
Key Highlights by Country
- Nigeria: Regained its position as the leader in equity funding, raising $520 million (+11% YoY) through 103 deals. The country also led in total deal count.
- Egypt: Saw the fastest growth in equity deal activity (+48% YoY), indicating renewed momentum in its VC ecosystem.
- Kenya: Dominated debt financing, accounting for 38% of total debt funding and 31% of debt deals.
Sector Trends
- Fintech: The standout sector, attracting 60% of equity funding ($1.3 billion) across 131 deals. It experienced growth in both deal count (+16%) and total funding (+59%), driven by four equity megadeals.
- Debt Financing: Represented 31% of total funding, a slight decline from 35% in 2023, but remains a significant component of capital for startups.
Regional Insights
- The top four markets – Nigeria, South Africa, Egypt, and Kenya – dominated 67% of the total funding, though this was down from 79% in 2023.
- Francophone Africa accounted for 55% of equity funding outside the top four markets, a decline from its 68% share in 2023.
- Beyond the leading countries, Ghana, Morocco, and Tanzania surpassed the $50 million equity funding threshold.
Francophone countries accounted for 55% of ROA equity funding volume vs. 68% in 2023
- Francophone African countries now represent 55% of total equity funding volume in the broader ROA group, confirming their attractiveness outside of the top 4. However, this still marks a significant decline from their 68% funding share in 2023.
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- Equity funding in Francophone African countries dropped significantly in 2024, falling 31% YoY to US$229M. This was accompanied by a 14% decline in deal volume, with 80 deals closed.
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- Despite this regional slowdown, some countries stood out: Morocco in particular (US$82M), but also Senegal (US$36M), Côte d’Ivoire (US$30M), and Rwanda (US$26M) ranked among the top 10, highlighting their continued appeal to investors.
Funding Stages and Trends
- Seed Stage: Performed well, with a 26% increase in ticket sizes.
- Series A & B: Experienced declines in ticket sizes (-18% and -27%, respectively).
- Growth Stage: Saw the only increase in total funding.
- Investor activity shifted toward the Seed+ stage, with reduced involvement at the Venture stage compared to previous years.
Gender Parity and Inclusion
- Female-founded startups raised only 7% of total funding and accounted for 18% of deals, reflecting a decline from 2023. However, agritech was a notable exception, achieving gender parity in funding.
Challenges and Opportunities
- The African VC ecosystem showed resilience, but challenges persist, such as slower Series A and B deal flow, extended fundraising timelines, and reliance on extension rounds.
- Debt financing remains constrained by high USD-denominated interest rates, underscoring the need for tailored solutions for African startups.
“Despite challenges in the global VC market, the African tech ecosystem continues to prove its resilience,” said Cyril Collon, General Partner at Partech.
“Fintech remains a key driver, illustrating the strength of the ecosystem and its foundational sectors.”
Figures and Statistics:
- Overall Funding: $3.2 billion total (equity: $2.2 billion, debt: $1 billion).
- Deal Activity: 457 equity deals (-3%), 77 debt deals (+4%).
- Investor Confidence: 583 unique equity investors (+2%).
- Country Performance:
- Nigeria: $520 million equity, 103 deals.
- Kenya: 38% of debt funding, 31% of debt deals.
- Egypt: +48% YoY growth in equity deals.
- Sector Highlights: Fintech secured $1.3 billion (60% of equity funding).
- Funding Stages:
- Seed stage: +26% in ticket size.
- Series A (-18%) and Series B (-27%) declines.
- Gender Parity: Female-founded startups: 18% of deals, 7% of funding.
- Debt Financing: 31% of total funding, down from 35%.
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