In the first quarter of 2024, African mobility startups attracted the largest share of investments as total funding across all sectors dropped by 62% compared to the previous year.
Following a lackluster 2023, when African startups raised only $2.2 billion, many entrepreneurs and investors had anticipated minimal changes in early 2024. Intelpoint’s data confirms this, with African startups raising just $329.5 million in 51 deals during Q1 2024. This is a sharp decline from the $873.9 million raised in Q1 2023, which was largely boosted by MNT-Halan’s $400 million funding round in February 2023.
Despite the overall decline, there was gradual growth month-over-month. In January, $70.7 million was raised, followed by a slight decrease to $67.8 million in February. March saw a rise, with $190 million raised, including a notable $100 million raised by Moove. Without Moove’s round, the total funding for March would have been $90.8 million.
Mobility and Fintech Sectors Lead Funding in Q1
Mobility startups were the top performers in Q1 2024. Moove raised $110 million in a Series B round led by Uber, as well as $10 million in debt funding for its expansion into India. Moove’s model, which helps ride-hailing drivers access vehicles without upfront payments, has faced some criticism in Nigeria due to repayment issues worsened by rising operational costs.
Other mobility startups securing funding included Planet42, which raised $16 million from Standard Bank, and Ampersand, which raised $12 million in January. Combined, these startups secured $178.6 million.
In contrast, the fintech sector experienced a slower start to the year, with only $38 million raised over the three months.
Maelis Carraro, Managing Partner at Catalyst Fund, expressed optimism for the future of climate tech funding in Africa, noting an increase in investor interest in climate solutions on the continent, despite the relatively small amount raised in Q1 2024. Climate tech was the third most funded sector during this period.
Funding Destinations and Types
The funding landscape saw little deviation, with Nigeria, Egypt, South Africa, and Kenya receiving the majority of the funds, accounting for 82% of the total. Equity funding remained dominant, representing 87.8% of investments, while debt financing made up 11.6%, and grants accounted for less than $2 million.
Later-Stage Funding Takes Precedence
Most funding in Q1 2024 was directed toward later-stage startups, with undisclosed rounds making up a substantial portion of the total ($140.5 million). Moove’s $100 million Series B was the only Series B round reported, while Series A rounds brought in $48 million.
Seed rounds accounted for $30.7 million, pre-Series A raised $6.7 million, and pre-seed rounds secured only $3.6 million.
Acquisitions and Exits
The topic of exits has gained more traction as investors seek returns. While African startups continue to attract interest, many investors emphasize the need for successful exits to justify their investments. Secondary exits, although offering opportunities for early investors, are less frequent, and IPOs are still unlikely in the near future. Acquisitions remain a viable exit strategy, though many of these transactions are undisclosed, raising questions about their profitability.
Notable acquisitions in Q1 included:
- Carbon acquiring Vella Finance
- PaySpace acquiring Deel
- Auto24 purchasing Kupatana
- Baim buying Orcas
Growth in Africa-Focused Funds
Despite the funding slump, several new Africa-focused funds have been launched to help bridge the gap. The largest was Partech’s $300 million fund, which will invest in African startups across various stages.
Other funds include:
- Satgana’s $8.6 million fund for climate tech
- Accelerate Africa, an accelerator backed by USAID, founded by Iyinoluwa Aboyeji, co-founder of Future Africa
- P1 Ventures, which raised $35 million to expand operations in Senegal and Kenya
Additional investors launching or closing new funds include BimaLab Africa Insurtech Accelerator, Sawari Ventures, Injaro, Seedstars, and weVentures.
Methodology
The data presented in this article is based on publicly available records and includes only disclosed funding amounts. The sector classifications may differ slightly from other reports, particularly in cases like Moove and Planet42, which are sometimes categorized as mobility fintechs but are classified here as mobility startups. The report considers only businesses with the majority of their operations in Africa, regardless of the nationality of their founders.
