African startups secured $3.2 billion in equity and debt funding in 2024, marking a 7% decline from the $3.49 billion recorded in 2023, according to the latest report from Partech Africa. The annual Africa Tech Venture Capital 2024 report highlights key investment trends, noting that while equity funding remained stable at $2.2 billion, debt financing dropped by 17% to $1 billion. “This growth is largely attributed to the increasing appetite for equity funding, as venture capitalists and private equity firms reinforced their commitment to African markets,” said a Lagos-based venture capitalist.
However, the decline in debt funding was largely influenced by rising interest rates and the strengthening U.S. dollar, which put financial pressure on African startups by increasing the cost of dollar-denominated loans and repayment obligations. Despite this, debt still contributed 31% of the total capital raised by startups across the continent.
Nigeria maintained its position as Africa’s leading destination for equity funding, attracting $520 million in investments. It was followed by South Africa ($459 million), Egypt ($297 million), and Kenya ($221 million). “These four countries, often referred to as the ‘Big Four,’ continued to dominate equity funding on the continent,” the report noted. However, their collective share of total funding dropped to 67% in 2024, down from 79% in 2023 and 72% in 2022.
Beyond these key markets, only Ghana, Morocco, and Tanzania managed to raise more than $50 million in equity funding last year. Sector-wise, fintech remained the dominant force, securing $1.3 billion, which accounted for 60% of total equity funding. Other high-growth sectors included Cleantech which accounted for 9%, E-commerce which accounted for 7%, Business services which accounted for 7% and Agritech which accounted for 4%.
On the debt financing front, Kenya led the pack with $382 million, followed by Egypt ($142 million), South Africa ($132 million), and Ghana ($118 million). Cleantech startups attracted the largest share of debt funding (40%), followed by fintech (34%) and connectivity-focused ventures (11%). The number of unique equity investors in African startups increased by 2% to 583 in 2024. However, Series A and B investments saw a decline, with Series A deal sizes dropping 18% and Series B shrinking by 27%.
Also, seed-stage investments experienced growth, with average deal sizes increasing by 26% as investors became more active in early-stage funding. Total funding declined across most investment stages, except for the Growth phase,” the report stated. Interestingly, megadeals—transactions exceeding $100 million—saw significant growth, with both their number (up 43%) and total value (up 57%) increasing. In 2024, there were three megadeals in debt and four in equity, totaling $1.1 billion.
Despite a challenging macroeconomic landscape, Africa’s tech ecosystem has shown resilience, with stable equity financing and an evolving debt market that reflects global economic trends. While startups must navigate currency fluctuations and rising interest rates, the continent’s innovation-driven economy continues to attract long-term investor interest.
