Economy
African Startups Funding Drops 21% to $4.1bn in 2023
By Adedapo Adesanya
The total value of funds secured by African startups dropped 21 per cent to $4.1 billion in 2023 from $5.2 billion in 2022 as a result of a wider global slump in funding, a report by Briter Intelligence showed.
According to the Briter Bridges’ Africa Investment Report 2023: Crisis or Adjustment?, after a decade of slow but steady rise, with $1 billion raised, African ecosystems saw a sudden funding spike after COVID-19 in 2021 and 2022, however, this growth halted in 2023.
Briter Bridges, an intelligence and research firm providing data and insights across emerging markets, said the slump in 2023 was due to a global venture investment downturn that impacted Africa’s access to finance, rising concerns around inflated valuations, business sustainability, and increased due diligence and scrutiny from investors.
“2023 was the first year in over a decade where the amount of investment flowing to Africa’s ventures was visibly lower than in previous years,” Mr Dario Giuliani, the founder of the firm said, adding that the trend alarmed investors and founders as “it came at a time when global venture markets took a hit and thousands of companies were forced to shut down.”
The data showed that the number of deals was 11 per cent higher at 1080 compared to 975 deals executed in 2022 while in terms of representation, there was a 30 per cent increase in funding that went to at least 1 female founder, 23 per cent more than 217 in 2022.
Fintechs continued to lead the sector that got the most funding even as there was a growing sector diversification. While fintechs got 32 per cent of the funding in 2023, others including mobility, jobs, health and biotech, agri and agritech, cleantech, education, e-commerce, and logistics & supply chain also had a piece of the pie.
Cleantech recorded 14 per cent of the fundraises, logistics (8 per cent), e-commerce (8 per cent), and jobs (6 per cent) among others.
Briter Intelligence showed that out of the $4.1 billion raised in 2023, 1 per cent of all funded companies (based on disclosed deals alone) captured 45 per cent of all funding. These include usual suspects that have built a name across the continent’s ecosystems throughout the past decade: MNT-Halan, M-Kopa, SunKing and Zipline. On the other hand. 99%, or 755+ companies captured about $2 billion in disclosed funding and 220+ companies announced their deals but never disclosed the amount.
The data showed that 68 per cent of the funding went to the top four markets led by Kenya with $805 million followed by Egypt with $675 million. Nigeria came next with $575 million while $565 million went to South Africa.
Emerging markets led by Tunisia raised $460 million followed by Rwanda with $350 million, Benin Republic with $125 million, and Senegal with $70 million.
In 2023, while early-stage deals hit new records, deals above $1 million contracted. More than 50 per cent of all disclosed early-stage investments were under $250,000.
Briter Intelligence noted that the investment contraction led to companies shutting down or significantly reducing their growth trajectory and falling back to their core market or product. Among these were Twiga Foods, Copia, Cellulant, Jumia, Wave, Marketforce, and Renmoney.
The report noted that 2023 saw public investors and Development Finance Institutions (DFIs) play a key role in funding growth rounds as most deals above $50 million involved DFIs, state/private banks, corporations, conglomerates, or foundations.
By Dipo Olowookere
A 1.08 per cent growth was further printed by the Nigerian Exchange (NGX) Limited on Friday on improved appetite for Nigerian stocks.
Data showed that the insurance sector lost 0.61 per cent yesterday due to profit-taking as the energy space gave up 0.08 per cent, while the commodity counter closed flat.
However, the industrial goods landscape appreciated by 2.06 per cent, the banking index improved by 1.31 per cent, and the consumer goods sector expanded by 0.83 per cent.
At the close of business on Customs Street, the All-Share Index (ASI) increased by 1,563.92 points to 147,040.07 points from 145,476.15 points and the market capitalisation went up by N996 billion to N93.722 trillion from N92.726 trillion.
UAC Nigeria led the advancers’ log yesterday after it grew by 10.00 per cent to N96.80, Transcorp Hotels jumped by 9.71 per cent to N172.80, Royal Exchange appreciated by 8.89 per cent to N1.96, Ikeja Hotel soared by 8.74 per cent to N31.10, and Veritas Kapital leapt by 8.07 per cent to N1.74.
On the flip side, Union Dicon declined by 10.00 per cent to N6.30, ABC Transport slipped by 9.88 per cent to N3.10, AXA Mansard depreciated by 7.19 per cent to N12.90, FTN Cocoa lost 4.62 per cent to trade at N4.75, and Guinea Insurance dropped 3.36 per cent to finish at N1.15.
A total of 38 stocks ended on the gainers’ table and 17 stocks finished on the losers’ table, representing a positive market breadth index and strong investor sentiment.
Traders transacted 361.6 million equities for N14.8 billion in 21,051 deals yesterday versus the 1.9 billion equities worth N19.2 billion traded in 23,369 deals a day earlier, showing a decline in the trading volume, value, and number of deals by 80.97 per cent, 22.92 per cent, and 14.20 per cent, respectively.
The busiest stock for the session was Zenith Bank with 59.5 million units worth N3.6 billion, Access Holdings traded 46.1 million units valued at N973.0 million, Fidelity Bank exchanged 29.4 million units for N560.4 million, FCMB transacted 27.9 million units worth N293.9 million, and Tantalizers sold 13.0 million units valued at N29.8 million.
By Adedapo Adesanya
Energy stocks influenced the 4.76 per cent loss recorded by the NASD Over-the-Counter (OTC) Securities Exchange on Friday, December 5.
The culprits were the duo of 11 Plc and Nipco Plc,with the former shedding N32.17 to end at N291.83 per share compared with the previous day’s N324.00 per share, and the latter down by N21.00 to sell at N195.00 per unit versus the previous session’s N216.00 per unit.
Consequently, the NASD Unlisted Security Index (NSI) slumped by 170.16 points to 3,401.37 points from 3,571.53 points and the market capitalisation lost N101.81 billion to close at N2.035 billion from the N2.136 trillion quoted in the preceding session.
The OTC securities exchange suffered the decline yesterday despite the share prices of three companies closing green.
Central Securities Clearing System (CSCS) Plc was up by N1.80 to close at N39.80 per share compared with Thursday’s price of N38.00 per share, Air Liquide Plc appreciated by N1.09 to N11.99 per unit from N10.90 per unit, and FrieslandCampina Wamco Nigeria Plc grew by 78 Kobo to N56.57 per share from N55.79 per share.
During the session, the volume of transactions rose by 6,885.3 per cent to 18.2 million units from 4.3 million units, the value of transactions ballooned by 10,301.7 per cent to N389.7 million from N347.2 million, but the number of deals declined by 29.7 per cent to 26 deals from 37 deals.
Infrastructure Credit Guarantee Company (InfraCredit) Plc ended the day as the most traded stock by value on a year-to-date basis with 5.8 billion units worth N16.4 billion, followed by Okitipupa Plc with 170.4 million units valued at N8.0 billion, and Air Liquide Plc with 507.5 million units worth N4.2 billion.
InfraCredit Plc also finished the day as the most traded stock by volume on a year-to-date basis with 5.8 billion units transacted for N16.4 billion, followed by Industrial and General Insurance (IGI) Plc with 1.2 billion units sold for N420.2 million, and Impresit Bakolori Plc with 536.9 million units worth N524.9 million.
By Adedapo Adesanya
The Naira depreciated further against the US Dollar in the Nigerian Autonomous Foreign Exchange Market (NAFEX) on Friday, December 5, as FX demand pressure mounts.
The Nigerian currency lost N2.60 or 0.18 per cent against the greenback to close at N1,450.43/$1 compared with the previous day’s N1,447.83/$1.
Equally, the domestic currency declined against the Pound Sterling in the official forex market during the session by N4.48 to trade at N1,935.45/£1, in contrast to Thursday’s closing price of N1,930.97/£1 and shrank against the Euro by 43 Kobo to end at N1,689.17/€1 versus the preceding session’s rate of N1,688.74/€1.
Similarly, the local currency performed badly against the US Dollar at the GTBank FX counter by N2 to close at N1,455/$1 versus Thursday’s N1,453/$1 but traded flat at the parallel market at N14.65/$1.
As the country gets into the festive period, pressure mounted on the local currency reflecting higher foreign payments and lower FX inflows.
However, there are expectations that the Nigerian currency will be stable, supported by interventions by to the Central Bank of Nigeria (CBN) in the face of steady dollar Demand and inflows from Detty December festivities that will give the Naira a boost after it depreciated mildly last month.
Traders cited by Reuters expect that the Naira will trade within a band of N1,443-N1,450/$1 next week, buoyed by improved FX interventions by the apex bank.
As for the crypto market, it was down yesterday due to profit-taking associated with year-end trading. However, the December 1-Year Consumer Inflation Expectation by the University of Michigan fell to 4.1 per cent from 4.5 per cent previously and 4.5 per cent expected. The 5-Year Consumer Inflation Expectation fell to 3.2 per cent from 3.4 per cent previously and 3.4 per cent expected.
With the dearth of official economic data of late, these private surveys have taken on a new level of significance and the market banks of them to make decisions.
Cardano (ADA) depreciated by 5.7 per cent to $0.4142, Dogecoin (DOGE) slid by 5.1 per cent to $0.1394, Ethereum (ETH) dropped by 3.9 per cent to $3,039.75, Solana (SOL) declined by 3.8 per cent to $133.24, and Litecoin (LTC) fell by 3.7 per cent to $80.59.
Further, Bitcoin (BTC) went down by 2.6 per cent to sell at $89,683.72, Binance Coin (BNB) slumped by 2.2 per cent to $883.59, and Ripple (XRP) shrank by 2.1 per cent to $2.04, while the US Dollar Tether (USDT) and the US Dollar Coin (USDC) remained unchanged at $1.00 each.
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