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
The Nigerian Exchange (NGX) Limited again failed to get out the danger zone on Friday after it further shed 0.33 per cent at the close of transactions.
The woes of the domestic stock exchange was compounded by the sustained weak investor sentiment after finishing with 19 price gainers and 40 price gainers, indicating a negative market breadth index.
Berger Paints lost 10.00 per cent to close at N35.10, C&I Leasing declined by 9.86 per cent to N5.03, MeCure Industries slipped by 9.77 per cent to N27.70, Champion Breweries depleted by 9.72 per cent to N13.00, and The Initiates crashed by 9.66 per cent to N10.75.
Conversely, NCR Nigeria gained 9.94 per cent to finish at N19.35, McNichols grew by 9.82 per cent to N3.02, Eunisell rose by 9.24 per cent to N70.90, Deap Capital jumped by 8.81 per cent to N1.73, and Ellah Lakes surged by 8.29 per cent to N11.75.
Data showed that Wema Bank was the most active stock yesterday, selling 90.9 million units worth N1.7 billion, Consolidated Hallmark traded 78.3 million units valued at N317.3 million, AXA Mansard exchanged 32.4 million units for N430.6 million, Access Holdings sold 23.4 million units worth N511.8 million, and Zenith Bank transacted 22.5 million units valued at N1.4 billion.
At the close of trades, investors bought and sold 527.2 million shares worth N15.4 billion in 24,637 deals compared with 619.6 million shares valued at N16.5 billion in 24,865 deals recorded a day earlier.
This indicated that the trading volume, value, and the number of deals contracted by 14.91 per cent, 6.67 per cent and 0.92 per cent, respectively.
Business Post reports that the insurance space slipped by 2.15 per cent, the banking counter shrank by 0.88 per cent, the consumer goods index fell by 0.47 per cent, the energy industry slumped by 0.25 per cent, and the industrial goods sector depleted by 0.11 per cent, while the commodity segment closed flat.
On the last trading day of the week, the All-Share Index (ASI) decreased by 501.74 points to 149,524.81 points from 150,026.55 points and the market capitalisation contracted by N319 billion to N94.998 trillion from N95.317 trillion.
By Adedapo Adesanya
The duo of Afriland Properties Plc and Air Liquide Plc extended the positive run of the NASD Over-the-Counter (OTC) Securities Exchange by a 0.07 per cent on Friday, November 7.
Afriland Properties Plc appreciated by N1.52 during the session to end at N20.73 per unit compared with the previous day’s N19.21 per unit, and Air Liquide Plc rose by 90 Kobo to close at N10.00 per share versus the preceding session’s N9.10 per share.
This raised the market capitalisation of the trading platform by N1.50 billion to N2.190 trillion from the N2.189 trillion it ended a day earlier, and the NASD Unlisted Security Index (NSI) increased by 2.51 to 3,661.07 points from the 3,658.56 points it ended on Thursday.
The bourse recorded a price loser yesterday and it was Central Securities Clearing System (CSCS) Plc, which fell by 15 Kobo to close at N40.00 per unit, in contrast to the previous day’s N40.15 per unit.
During the trading session, the volume of securities traded by the market participants went down by 57.9 per cent to 197,833 units from the previous day’s 221,284 units, the value of securities decreased by 66.3 per cent to N4.0 million from N11.9 million, while the number of deals went up by 9.1 per cent to 24 deals from 22 deals.
When the market ended for the day, Infrastructure Credit Guarantee Company (InfraCredit) Plc was the most traded stock by value with a year-to-date sale of 5.8 billion units valued at N16.4 billion, followed by Okitipupa Plc with 170.3 million units transacted for N8.0 billion, and Air Liquide Plc with 507.4 million units traded for N4.2 billion.
InfraCredit Plc was also the most traded stock by volume on a year-to-date basis with 5.8 billion units sold for N16.4 billion, trailed by Industrial and General Insurance (IGI) Plc with 1.2 billion units worth N419.7 million, and Impresit Bakolori Plc with 536.9 million units transacted for N524.9 million.
By Adedapo Adesanya
The Naira appreciated further against the US Dollar in the Nigerian Autonomous Foreign Exchange Market (NAFEM) on Friday, November 7, by 16 Kobo or 0.12 per cent to close at N1,436.58/$1, in contrast to the N1,436.74/$1 it ended a day earlier.
Equally, the Nigerian Naira gained against the Pound Sterling in the official market yesterday by 21 Kobo to finish at N1,882.35/£1 compared with Thursday’s closing price of N1,882.56/£1 and improved against the Euro by 19 Kobo to trade at N1,657.52/€1 compared with the previous day’s N1,657.71/€1.
Once again, the domestic currency retained its previous day’s value of N1,446/$1 at GTBank forex counter, and at the parallel market, it closed flat at N1,450/$1 during the trading day.
The Naira stability is hinged on continued FX interventions from the Central Bank of Nigeria (CBN) and overall investor sentiment which continues to get backing from strong external reserves and expectations of sustained high crude oil prices.
Nigeria’s gross external reserves increased to $43.324 billion as of November 6, up from $43.197 billion at the end of October.
This week, the country saw a 477 per cent oversubscribed Eurobond raise which provided additional support for the local currency outlook as it signifies good foreign investment sentiments on the Nigerian economy.
In the crypto market, there were some gains as investors clawed back after recent losses as economic data suggests a December Federal Reserve rate cut could be very much back on the table.
Amid the government shutdown and lack of official statistics, the University of Michigan Consumer Sentiment Survey released on Friday showed that suggest the central bank might have to re-consider plans not to cut rates again at its final meeting of the year in December.
Litecoin (LTC) added 10.7 per cent to sell at $99.97, Dogecoin (DOGE) expanded by 8.2 per cent to $0.1795, Cardano (ADA) appreciated by 6.6 per cent to $0.5791, Ripple (XRP) gained 4.2 per cent to close at $2.31, Binance Coin (BNB) oared by 2.8 per cent to $993.06, Ethereum (ETH) jumped by 2.8 per cent to $3,445.19, Solana (SOL) increased by 2.3 per cent to $160.36, and Bitcoin (BTC) advanced by 0.5 per cent to $102,371.77, while the US Dollar Tether (USDT) and the US Dollar Coin (USDC) remained unchanged at $1.00 each.
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