The first quarter of 2023 witnessed a significant slowdown in venture capital funding for African startups, with Nigeria experiencing a particularly sharp decline. While the country typically leads the pack in terms of funding, it slipped to fourth place behind Egypt, South Africa, and Seychelles in Q1 2023, raising only $44.1 million, a stark contrast to the $566 million raised in the same period of 2022.
Despite this decline, Nigeria maintained its position as a leader in deal count, recording 18 deals in Q1 2023. Egypt emerged as the top recipient of funding, securing $450.4 million.
Fintech Continues to Dominate
Fintech once again reigned supreme as the most funded sector, attracting over $584 million, a significant portion of the total funding raised across the continent. Lending and payments remained the dominant sub-sectors within fintech.
Healthcare Emerges as a Prominent Sector
In line with investor predictions, healthcare emerged as a strong contender, raising $40.6 million in Q1 2023. This sector witnessed notable activity, including the acquisition of Doctoora by Evercare Hospital.
Acquisition Activity Picks Up
The first quarter of 2023 saw a surge in acquisition activity. Notable deals included the acquisition of Galactech by GBarena in the gaming sector and acquisitions within the fintech space, such as FairMoney’s acquisition of CrowdForce.
Gender Gap Remains a Significant Concern
The gender disparity in funding persists, with all-male founding teams securing the lion’s share of investments, raising $681.6 million compared to $15 million raised by all-female founding teams. Startups with two co-founders continued to attract the most significant funding.
