In Q1-2024, the African startup landscape witnessed significant shifts and challenges, with both the number of deals and total funding amounts experiencing sharp declines. Despite this, certain regions and sectors showcased resilience and promising growth, reflecting the dynamic nature of the ecosystem. 

Let's delve into the key highlights and trends that defined the African startup and VC scene in the first quarter of 2024.

Delving into Africa’s Startup Funding Scene in Q1-2024

In Q1-2024, the African startup landscape experienced a notable deceleration. The number of deals diminished to 134, marking a staggering 78% decline compared to the previous year. Similarly, the total funding amount for Q1-2024 dropped by 81% to $661 million, signaling a significant downturn in investor activity. This downturn brings Q1-2024 to its lowest level since the pandemic year of 2020. 

While 2022 remains the peak year in terms of both the number of deals and funding amounts, the stark contrast in Q1-2024 underscores the volatility and challenges present in the startup and VC landscape, indicating a need for resilience and adaptability among stakeholders.

Africa’s Top Countries in Startup Funding in Q1 2024

Nigeria and Kenya led the African startup scene in Q1-2024, recording the highest number of deals with 30 and 29 deals, respectively. Following closely, Egypt and South Africa ranked 3rd and 4th, securing 17 and 16 deals, respectively. However, concerning funding amounts, South African startups took the lead, raising a total of $247 million. Nigeria and Kenya also secured substantial funding, with both countries surpassing $100 million. 

This dominance by South Africa and Nigeria can be attributed to significant funding rounds from key players in these regions, such as Moove from Nigeria securing $100 million in funding, and Payscale in South Africa being acquired for $100 million.

Africa’s Leading Sectors in Startup Funding During Q1 2024

Fintech was the preferred sector targeted, capturing 24.6% of all deals. Logistics and transport followed closely behind, representing 11.9% of deals, while Healthcare and Energy & Water each accounted for 11.2% of deals.
When it comes to funding amounts, Fintech secured approximately a third of all the sectors targeted, reflecting significant investor interest in financial technology innovations. Transport and logistics followed closely, capturing 22.9% of funding, while Education secured 16.4% of the total funding amount.

Africa’s Startup Funding by Stage in Q1 2024

Half of the deals in Q1 2024 were registered as venture rounds, followed by debt at 14.2%, and seed and pre-seed each at 8.2%. When it comes to funding amounts, M&A deals led the way with the highest amount of funding at around 30%, followed by venture rounds at 22.8%, debt at around 20%, and series B at 15%. 

This distribution underscores the prominence of venture capital investments and M&A deals in the funding landscape.

Africa’s Gender Dynamics Among Startup Founders in Q1 2024

In Q1 2024, male-only founding teams claimed a substantial 44% share of closed deals and 54.4% in funding raised. Meanwhile, startups led by male single founders secured 27.6% of deals and 19.6% of funding. 

Gender-diverse teams ranked 3rd in deals and 2nd in funding. However, the limited activity of female-only startups highlights the urgent need for greater diversity and inclusion within the African startup ecosystem.

Standout African VC Deals in Q1 2024

In Q1 2024, Nigeria's Moove stood out, securing a staggering $100 million in a series B round. This significant investment round included new funding from Uber and participation from existing investors like Mubadala, valuing Moove at $750 million. Additionally, Valu and Planet 42 secured notable deals of $18.7 million and $16 million, respectively.

Africa’s Major Investors in Startup Funding in Q1 2024

Catalyst Fund has been the most active investor in Q1 2024, leading with 6 investments, followed closely by Launch Africa, Techstars, and GSMA Innovation Fund, each recording 5 deals.

Notable Startup Exits in Africa in Q1 2024

Africa witnessed seven exits in Q1 2024, highlighted by the acquisition of PaySpace by Deel for a staggering $100 million and the acquisition of DocFox by nCino for $75 million. Such acquisitions not only provide lucrative opportunities for investors and founders but also validate the potential and value of startups originating from the African continent.

In summary, Q1-2024 revealed a mixed landscape for African startups. While facing a downturn in deal numbers and funding, standout performers like Moove in Nigeria and Payscale in South Africa showcased resilience and attracted significant investments. However, gender disparities remain evident, suggesting a need for greater inclusivity. Moving forward, fostering resilience and innovation will be vital for driving growth and seizing opportunities in the African startup scene.