2024 was a defining year for Africa’s fintech sector, as it solidified its position as the darling of investors, drawing in over $1 billion in funding. This remarkable achievement not only marked a 47 percent share of total startup funding but also showcased the sector’s resilience and potential for growth. Let’s take a deep dive into how fintech rose to dominance and how other sectors fared in the broader African startup ecosystem.
Fintech’s Meteoric Rise
According to Africa: The Big Deal, a data insight firm tracking startup investments of $100,000 and above, the fintech sector’s funding share increased significantly from 42 percent in 2023 to 47 percent in 2024. This marked its highest proportion since 2021, cementing its reputation as a lucrative investment avenue.
In total, African startups across all sectors raised $2.2 billion in 2024, and fintech accounted for nearly half of that amount. Four standout fintech companies — Moniepoint, Tyme, MNT-Halan, and M-Kopa — ranked among the top ten fundraisers of the year, demonstrating the sector’s continued robust growth and innovation.
The Unicorn Effect: Tyme’s Role in the Comeback
While fintech’s dominance was not a foregone conclusion at the beginning of 2024, the sector staged an impressive recovery in the latter half of the year. A pivotal moment was Tyme’s rise to unicorn status, a milestone that underscored the sector’s capacity to produce game-changing enterprises. This achievement, alongside other high-profile deals, helped to restore investor confidence and propel fintech to the forefront.
Energy Sector: A Waning Giant
Energy maintained its position as the second most-funded sector in 2024, attracting $440 million, or 20 percent of the total funding. However, this represented a steep 42 percent year-on-year decline. Key players such as d.light ($192 million) and Sun King ($87 million) contributed significantly, accounting for nearly two-thirds of the sector’s total funding.
The decline in energy funding mirrored broader trends in climate tech investments, which dropped to 32 percent of total funding from 36 percent in 2023. Notably, energy’s share of climate tech investments fell from 72 percent to 59 percent, signaling a shift in investor priorities. Meanwhile, non-energy climate tech funding remained relatively stable at $289 million, a modest 4 percent decrease year-on-year.
Logistics and Transportation: A Sector on the Rise
Amid the overall funding downturn, logistics and transportation emerged as a bright spot, increasing its funding by 6 percent year-on-year to reach $288 million. The sector’s share of total funding rose from 9 percent in 2023 to 13 percent in 2024, highlighting its growing importance in Africa’s startup ecosystem. Companies such as Moove, Basigo, and Spiro led the charge, attracting significant investments and driving innovation in transportation and delivery services.
SEE ALSO: Bamboo Becomes First Nigerian Fintech to Secure U.S. Broker-Dealer License
Challenges in Other Sectors
While fintech, energy, and logistics captured the lion’s share of funding, other sectors faced significant challenges. AgriTech and Food saw a 44 percent decline in funding, reflecting a cooling of investor interest. Healthcare fared even worse, experiencing a 61 percent drop. These declines underline the shifting priorities of investors, who are increasingly drawn to high-growth, scalable sectors.
Investor Confidence in High-Growth Sectors
Fintech, energy, and logistics collectively accounted for 80 percent of total funding in 2024, showcasing investor confidence in these high-growth areas. Fintech’s adaptability and proven track record, energy’s potential for long-term impact, and logistics’ rising relevance in addressing infrastructure gaps all contributed to this concentrated investment trend.
Looking Ahead
As we move into 2025, the African startup ecosystem faces both opportunities and challenges. While fintech continues to dominate, the broader ecosystem must address the funding gaps in underrepresented sectors like healthcare and AgriTech. For investors and startups alike, the key to sustained growth will be balancing innovation with diversification.
2024 was a banner year for fintech, and its success story is a testament to the resilience and ingenuity of African entrepreneurs. The question now is whether other sectors can replicate this success and help create a more balanced and robust startup ecosystem across the continent.
