Despite a notable investment slowdown across the African continent, interest from several investors and venture capitalists remains strong. Leading firms such as Launch Africa, Techstars, and 54 Collective continue to actively engage with African startups, as revealed by a new report from Africa-focused tech startup analytics company, Africa the Big Deal.
Africa’s Investment Landscape in H1 2024
According to the report, 286 investors participated in at least one deal valued at $100,000 or more during the first half of 2024. Although this number is lower than the 393 investors seen in the same period last year and significantly below the 698 involved in H1 2022, it demonstrates that African startups continue to attract substantial interest.
However, only a small fraction of these investors have been highly active. Out of the 286 venture capitalists, only eight participated in five or more deals. These included Launch Africa, Techstars, 54 Collective (formerly Founders Factory Africa), Catalyst Fund, Renew Capital, Y Combinator, the U.S. Development Finance Corporation (DFC), and Baobab Network.
Launch Africa: Leading the Pack
Launch Africa emerged as the most active venture capital firm in the first half of 2024, taking part in 12 deals. Founded in 2020 by Zachariah George and Janade Du Plessis, Launch Africa has positioned itself as a leading Pan-African VC fund, addressing the funding gap in seed and pre-Series A investments across the continent.
The fund raised over $36 million in its first venture, investing $31 million in 133 startups across 22 African countries. According to Africa the Big Deal, Launch Africa signed deals almost every other week in H1 2024 and is well on track to match or exceed the 19 deals it completed in 2023.
Techstars: A Consistent Player in Africa
Techstars, a global pre-seed venture capital firm, was the second-most active investor in Africa during the first half of 2024. With nine deals completed, Techstars continues its high level of activity, following an impressive 2023 where it completed 56 deals—more than one per week. While the number of deals in H1 2024 represents 32% of its total deals from the same period last year, Techstars remains a key player in the African startup ecosystem.
Recently, Techstars launched the 2024 edition of its accelerator program in collaboration with Labs by ARMS, reinforcing its commitment to early-stage investment in Africa.
54 Collective and Other Active Investors
54 Collective (formerly Founders Factory Africa) joined Catalyst Fund and Renew Capital as joint third-most active investors in the first half of 2024, with each firm involved in seven deals. 54 Collective focuses on empowering early-stage startups across Africa’s diverse markets by offering hands-on venture support and investment opportunities. In a recent rebranding, the firm expanded its scope to give African startups more global reach.
Catalyst Fund, known for its thesis-driven investments and its hands-on approach, also showed consistent activity, with the potential to match its 2023 record of 16 deals. Renew Capital, based in Addis Ababa, Ethiopia, exceeded its 2023 total of five deals by completing seven in H1 2024.
Emerging VCs: Y Combinator, DFC, and Baobab Network
Y Combinator, the renowned U.S.-based accelerator, remains a key player in Africa’s venture scene, with a potential to match its 2023 total of 12 deals. Meanwhile, DFC and Baobab Network, both of whom surpassed their 2023 deal counts by mid-2024, have shown a strong commitment to the continent’s startup ecosystem.
DFC, a U.S. government agency that finances private-sector projects, and Baobab Network, which invests in early-stage African startups, continue to expand their portfolios in Africa, highlighting the region’s potential as a hub for innovation and entrepreneurship.
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Shifting Dynamics in Africa’s VC Landscape
The report from Africa the Big Deal also pointed out some notable absences from the list of most active investors in H1 2024. Firms such as Ventures Platform, Norrsken, Flat6Labs, and LoftyInc, all of which were highly active in 2023, have seen fewer deals this year. However, many of these firms are currently raising new funds, which suggests they may ramp up their activities in the near future.
Goodwell Investment’s uMunthu II Fund: A Promising Development
Amid the current investment climate, Goodwell Investment is preparing to raise EUR 150 million for its new uMunthu II investment fund. This initiative underscores the ongoing interest in African startups and the potential for growth in sectors like fintech, healthcare, and supply chain management.
Conclusion
While Africa has seen a slowdown in venture capital activity compared to previous years, the continent remains a focal point for several key investors and venture capitalists. With firms like Launch Africa, Techstars, and 54 Collective leading the charge, African startups continue to receive essential funding, helping them tackle some of the continent’s most pressing challenges. The next half of 2024 will be critical for assessing whether these investment trends will continue to grow or stabilize as the African startup ecosystem evolves.
