Kenya tops Africa in startup funding in first six months of 2023

The country received Sh72.8 billion in equity funding from investors in Africa in the review period

In Summary

• According to a new report by Briter Bridges, Kenya came in first place, Egypt second, followed by South Africa, then Rwanda, and Nigeria came fifth.

• Africa’s innovation industry is now worth more than $21billion (Sh2.940 trillion).


Kenya has once again lived up to its bill as Africa's silicon savanna, netting over Sh70 billion in start-up funding in the first six months of the year.

The latest report by Briter Bridges, a global business analytic firm with operations in Africa, Latin America, and Asia Pacific, shows the country received $ 520m (Sh72.8 billion) in funding ahead of its regional peers. 

Egypt followed closely with $510m (Sh71.4 billion), while South Africa closed the top three slot with $ 400million (Sh56 billion)

Investors pumped $330 million or Sh46.2 billion in startups in Rwanda, with Nigeria closing the top five with $280m (39.2 billion).

However, in terms of deal volumes, Nigeria led the continent with over 100 deals, followed by Kenya with over 80 deals,  South Africa with over 60 deals, Ghana with 35 deals and Egypt with 15 in the first half of the year. 

The Briter Bridges report shows that Africa’s innovation industry is now worth more than $21billion (Sh2.940 trillion).

It however notes that “this milestone has come at a time where the change in the global macro environment is raising questions about the viability of investing in startups, let alone in Africa.”

According to Briter Bridges, the report released in August is founded upon the analysis of announced investment deals and disclosed deal values, primarily spanning the period from 2021 to June 2023.

Data was collected through secondary research in addition to receiving data directly from founders and investors.

The report aims to offer a comprehensive and insightful overview of the investment landscape, crafted and made possible by virtue of deep industry engagement and proprietary methodologies that have been applied in the collection and analysis of data.

According to the report, the first six months of 2023 have been particularly challenging for startups and investors alike looking to raise funding.

The volume of funding dropped by 26 per cent from H2 2022 to H1 2023 and has largely been on a downward trend in 2023.

“Funding to startups in Africa peaked from Q3 2021 to Q1 2022 with the downturn in funding volumes starting in Q2 2022. Each quarter following Q2 saw a decrease in the volume of deals. By Q4, the volume of deals was down more than 50 per cent,” it states.

On the deal activity, the report indicates that there is also a decline, with the majority of deals happening at the incubator/accelerator stages.

“Deal activity slowed in the first six months of 2023 with the exception of June where 6 accelerator and ESO programs announced new cohorts," the report reveals.

“The upshot in deal activity in June 2023 is largely attributable to 6 accelerator and ESO programs announcing new cohorts. This accounts for an estimated 80 per cent of announced deals in June.”

According to Brites Bridges, Mega deals account for a significant majority of total disclosed volumes.

“While this has been a recurrent feature over the years, there exists a noteworthy shift in the composition of investors who are taking the lead in these substantial transactions,” Brites Bridges revealed.

Historically, Venture Capitals (VCs) have been at the forefront of mega deals. However, a distinct evolution is now evident, as Development Finance Institutions (DFIs) and corporate venture entities have emerged as prominent players spearheading these deals.

In the report, the markets that experienced the biggest drop off in funding in H1 2023 were also those markets that saw the fastest increasing in funding in 2021 and 2022.

“Egypt experienced the sharpest decline in deal activity in H1 2023 following its rapid ascent into the top 3(Fintech, Cleantech and Health and Biotech) in 2022. Similarly, Nigeria, which saw the minting of the most unicorns in Africa, saw the biggest drop off in funding volumes."

“South Africa, which saw the lowest share of funding amongst the Big 4 in 2022, has captured the largest share of funding so far this year. Unlike the rest of the Big 4, this has largely been driven by a clustering of deals at the mid-stage where the rest of the continent is feeling the squeeze. Similarly, Kenya has remained resilient in terms of number of deals,” it added.

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