Faltering startup funding witnessed a rebound in May, where African players raised fresh capital totalling $187 million.

This is according to a report by ‘Africa: The Big Deal’, which monitors deals announced by startups on the continent.

In April, the firm’s data showed that African startups raised $75 million, hence, the May figure showed a 149 per cent increase in funding for the continent’s startups.

According to the report, 64 ventures received at least $100,000 in funding, a very high number compared to previous months, while 17 startups raised at least $1 million.
Between January and May, an average of 38 startups raised at least $100,000 each month per the report.

‘Africa: The Big Deal’ reported that the total funding announced last month was split between four per cent in grants, 31 per cent in equity, and 65 per cent in debt.
The total debt funding for the month stood at $122 million and it includes the $51 million raised by M-KOPA and $50 million by Spiro.
According to the report, three exits made the news in May including Lesaka’s acquisition of Adumo for $85 million, Busbud’s acquisition of Ratality in South Africa, and the much-discussed acquisition of Brass by Paystack-led investors for an undisclosed amount.
The research firm disclosed that $729 million has been announced in funding excluding exits since the beginning of the year.

‘Africa: The Big Deal noted that the amount still lagged behind previous periods: $1.7 billion in January to March 2023; $2.7 billion in January to March 2022 and $1.1 billion in the same period in 2021.

“However, in terms of number of ventures raising at least $1 million, 2024 so far compares rather well to some previous years: 90 vs. 95 in January to May 2023 and 91 in January to May 2021. 2022 was exceptional though with 200 ventures involved in $1 million+ deals in Jan-May,” it said.

Although a Nigerian startup, Moove, had led African startup fundraising in the first quarter of this year, it was a bit silent in the country in May as only two major deals totalling less than $7 million were announced by Nigerian startups.

These include the $4.5 million raised by digital identity solutions company, Seamfix, and the $1.9 million pre-seed round raised by Logistics startup, Renda.
Recall that in an earlier report by The Guardian, of the $15 billion startups funding that entered Africa in 2019, Nigeria accounted for 30 per cent, which amounted to $4.4 billion. Within this period, Kenya, got $2.9 billion; South Africa, $2.4 billion and Egypt, $2.3 billion of the $15 billion.

‘Africa: The Big Deal’ had noted that the most striking was the relative weight of the big four, which attracted 84 per cent of all the start-up funding in Africa since 2019, with Nigeria alone representing 30 per cent of the total.

According to it, Kenya came second, South Africa third, and Egypt a close fourth. The report noted that the big four is also home to more than three quarters (25 per cent for Nigeria) of all ventures having raised $1 million or more during the period.
Specifically, with emphasis on the big four, in 2021, Nigeria got $1.7 billion; South Africa, $910 million; Egypt, $500 million and Kenya, $420 million.
In 2022, Nigerian startups got $1.2 billion; Kenya, $1.1 billion; Egypt, $800 million and South Africa, $555 million.

The funding, however, went south in 2023 with Kenya getting $800 million; Egypt, $640 million; South Africa, $600 million and Nigeria getting $410 million.

Meanwhile, in the last five years, in terms of over $1 million start-ups, South Africa is slightly ahead of Kenya, noting that things are shifting over time though.