•In East Africa, Kenya’s share grew from 86 percent in 2022 to 91 percent in 2023, showing its dominance in East Africa.
•Fintech is still king in attracting funding, accounting for about 45percent of the total funding. But energy-led startups are increasingly gaining traction.
Image: BRIAN OTIENO
Kenyan start-ups attracted $800 million (Sh127.2billion) in venture capital in 2023 surpassing, Egypt, Nigeria and South Africa to top the continent.
A new report by Africa: The Big Deal, a platform for startup funding shows capital injection in Kenya accounted for 28 percent of all funds raised in the continent.
Egypt which topped in 2022 came second with $640m(Sh101.8billion), followed by South Africa with $600 million (Sh95.4 billion) and Nigeria $410 (Sh65.2billion).
In East Africa, Kenya’s share grew from 86 percent in 2022 to 91 percent in 2023, stamping its dominance in East Africa.
The report shows that startups that raised $100,000 (Sh16million) and above in the country stood at 93.
“If we look at things from a regional point of view, 2023 has seen a rebalancing of start-up investments across the continent. While Eastern Africa comes out on top, the four key regions have attracted rather comparable amounts of funding last year,” reads the report in part.
With nearly half a billion dollars raised by Sun King and M-Kopa alone, Eastern Africa attracted $880m (Sh139.9billion) in 2023, representing 31 percent of all the start-up investment on the continent.
It therefore took the number one spot up from position two in 2022 and four in 2021.
Debt represented more than half (56 percent) of the funding raised in the region and overall 130 start-ups raised $100,000 or more during the period.
Fintech is still king in attracting funding, accounting for about 45 percent of the total funding. But energy-led startups are increasingly gaining traction.
For the first time, Northern Africa was the second-most attractive region on the continent. As start-ups from the region recorded a 39 percent decline year-on-year to $670m (Sh106 billion).
Southern Africa emerged as the only region among the four primary regions to register a moderate yet positive growth of six percent year-on-year.
None of the startups in the region secured funding exceeding $100 million, with the top three fundraisers —Planet42, TymeBank, and E4—accounting for only approximately one-third of the total regional funding, in contrast to 57 percent in Eastern Africa and 86 percent in Northern Africa.
The percentage was even less in Western Africa at 23 percent, yet it boasted the highest number of ventures securing $100,ooo or more (191, constituting 39 percent of the continent's overall total).
Despite raising just over $600 million in funding, which is 2.6 times less than in 2022, the region fell from the top spot to fourth.
This marks a significant decline in its performance since 2019 when the platform began monitoring deals.
While being the only region to record a 33 percent year on year growth, from $51m in 2022 to $68m in 2023, Central Africa continues to represent a fraction of the total funding (2 percent), orders of magnitude smaller than its neighbours.
The year 2023 marked the lowest funding for African startups since 2020’s $2.1 billion (Sh332 billion). It’s a 36 percent decline from 2022’s $5 billion (791 billion) total. The funding streams shrunk as harsh economies bit.