African Tech Firms Suffer 57.2% Slash in Funding

By Adedapo Adesanya

African tech firms raised $649.3 million between January 1 and March 31 this year, down 57.2 per cent of the total from the corresponding period in 2022, according to data from Disrupt Africa.

This is as slow funding affected the ecosystem, which is facing global headwinds, which is, in turn, affecting everything, including funding.

This is according to the most recent edition of the annual African Tech Startups Funding Report released by Disrupt Africa in partnership with Flat6Labs, MarketForce, 4Di Capital, Mercy Corps Ventures, Newtown Partners, and InsiderPR.

There was a drop in the number of companies that raised funding as only 87 startups have secured funding, less than half the number (175) that had done so by this time last year.

This showed that this year might also face drops at this pace compared to 633 African tech startups that raised a combined $3.3 billion in 2022.

Last year, the number of funded startups increased by 12.2 per cent to 564 in 2021, while the total secured funding jumped 55.1 per cent to $2.1 billion in 2021.

“Last year’s Q1 ended up accounting for around half the startups and half the total investment for the whole of 2022, so if the current trajectory holds, then year-on-year funding looks set to decline by more than 50 per cent,” Disrupt Africa said.

This is in contrast to data from Africa: The Big Deal, which showed that start-ups in Africa raised more than $1.3 billion in the first quarter of the year, including exits.

The data published by the duo of Max Cuveiller and Maxime Bayen showed that startups on the continent also recorded their best performances in the quarter since mid-2022 when they faced several headwinds.