Recent report have revealed that Africa’s leading startup ecosystem the ‘big four’ which comprise South Africa, Kenya, Nigeria, and Egypt, attracted 87% of funding in the region, their largest share since 2019.
These regions were home to 71% (357 out of 500) of the start-ups who raised $100k or more on the continent last year.
Despite the 36% decline in fundraising in 2023, down from the $5 billion recorded in 2022, marking the lowest figure since 2020 ($2.1 billion), the big four nations continued to shine.
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In terms of funds raised by region, the report showed that North Africa captured the largest share with 33.67% of the total funds raised, followed by East Africa (26.22%), Southern Africa (19.94%), West Africa (17.89%), and Central Africa (1.92%)
By sector, fintech start-ups remain the best-funded nuggets in Africa, accounting for 45% of total financing raised last year.
Here is How Each Country in the ‘Big Four’ Performed
Kenya
With just under $800m raised in 2023, Kenya shot up to the first position, after it attracted the most funding, 28% of the continent’s total. While it suffered a decline (-25% YoY), its share of Eastern Africa’s funding grew from 86% in 2022 to 91% in 2023. 93 start-ups raised $100k or more during the period (19% of Africa’s total).
Egypt
In Egypt, there were 48 such ventures raising $100k+ in 2023, the lowest number out of the Big Four. But thanks to a YoY decline (-20%) it was enough for the country to claim the second spot.
Egypt’s share of North African funding grew substantially from 72% in 2022 to 95% in 2023 (+23pp, by far the strongest progression), due both to the magnitude of MNT-Halan’s fundraising, and Algeria and Tunisia’s inability to repeat their strong 2022 performance.
South Africa
South Africa’s share of regional funding remains the highest at 97%. The 70 start-ups who raised $100k or more in the country cumulated $600m in funding i.e. 21% of the continent’s total. South Africa was the only one of the Big Four not to see its total funding shrink between 2022 and 2023 (+8% YoY).
Nigeria
Nigeria is reported to be the country where the most dramatic change happened in 2023. While the country still claimed the highest number of start-ups to raise $100k or more on the continent), the amount they raised was divided by 3 YoY (-67%) to reach $410m, compared to $1.2b in 2022, and $1.7b in 2021.
As a result, its share of Western African funding continued to drop to reach 68%, down from 85% in 2021, and 77% in 2022. This marked the lowest regional share of any Big Four market since 2019.
According to investors, the ‘Big Four’ have continued to remain the regions with the highest funding because their markets include talent, existing innovation, infrastructures that need disruption, and the deepness of technology infrastructure which covers telecommunications, mobile money penetration, government alliances, and clear regulations.