Kenya has emerged as the top destination for tech startup venture funding in Africa in 2024, displacing long-time leader Nigeria. A recent report by Africa-focused venture funding analytics firm, Africa: The Big Deal, reveals that Kenyan tech startups have attracted an impressive $437 million, accounting for 31% of the total venture capital raised across the continent so far this year. This is a significant milestone for Kenya, showcasing its growing appeal to investors.
Egypt Follows Close Behind
Not far behind, Egypt has secured the second position, raising $373 million in 2024, representing 27% of the total African tech startup funding. Combined, Kenya and Egypt account for 58% of the total venture capital flowing into the continent, a notable increase from previous years. This year marks both countries’ highest-ever share of funding, underscoring their growing influence in the African tech ecosystem.
Nigeria’s Decline in Venture Funding
Meanwhile, Nigeria, once a dominant player, has seen a steep decline in venture funding. The West African country managed to attract only $218 million in the first nine months of 2024, representing just 15% of the total funding—down significantly from its average of 35% between 2019 and 2022. This is despite a slight improvement from its 14% share in 2023. Nigeria’s downward trend has raised concerns about its ability to maintain its position among the Big 4 tech ecosystems in Africa.
South Africa’s Underperformance
South Africa has also struggled to maintain its venture funding momentum, attracting only $125 million in 2024, representing a mere 9% of the total funding on the continent. This is the country’s worst performance since 2019 when it accounted for just 6% of total African venture funding. Between 2020 and 2023, South Africa averaged 18% of the continent’s total venture capital, making 2024 a significant underperformance.
Q3 2024: Kenya and Egypt Dominate, Nigeria Falls Behind
In the third quarter of 2024, Kenya and Egypt continued to dominate venture funding. Egypt raised $272 million, accounting for 43% of the total $600 million investment into African tech startups, while Kenya secured $201 million (or 32%). Together, these two countries attracted three-quarters of the total funding in Africa during this period.
In contrast, Nigeria raised just $26 million in Q3, highlighting its underperformance. Notably, even Tanzania attracted more funding than Nigeria, securing $43 million. South Africa and Ghana also outperformed Nigeria, raising $40 million and $35 million, respectively.
The Big 4 Tech Ecosystems and Funding Distribution
Despite the challenges faced by Nigeria and South Africa, Africa’s Big 4 tech ecosystems—Kenya, Egypt, Nigeria, and South Africa—are still responsible for 82% of the total venture funding on the continent in 2024. The remaining 18% is spread across 23 other African markets, with countries like Tanzania, Ghana, Morocco, Uganda, and Rwanda each recording at least one $100k+ deal since the beginning of the year.
Gender Disparities in African Venture Funding
The gender disparity in African venture funding remains a critical issue. Male-led startups continue to dominate the funding landscape, with $1.4 billion of the total $1.463 billion going to tech startups with male CEOs, representing over 95% of the total funding. In stark contrast, startups with female CEOs received only $63 million, representing less than 5%, a decline from the 5.6% average seen between 2019 and 2023.
Startups founded solely by women received less than 1% of the total funding, a significant drop from the 2.1% average over the past four years. Furthermore, only 9% of the total African venture funding went to founding teams with at least one woman, a sharp decline from the 17% average between 2019 and 2023. This highlights the growing gender inequality in venture capital distribution across the continent.
Conclusion: A Shifting African Tech Landscape
As 2024 progresses, the African tech startup landscape is witnessing significant shifts. Kenya and Egypt have risen to the top, attracting the lion’s share of venture capital, while traditional powerhouses like Nigeria and South Africa have faced setbacks. Gender disparities in funding continue to worsen, with female-led startups struggling to secure investment. With the year still ongoing, it remains to be seen whether these trends will continue or if there will be a resurgence in other markets before year-end.
