Year 2024 Marks a Mixed Scenario for African Startups, with Investments Focusing on Sustainable Expansion and Profitability
In the dynamic world of African startups, a significant shift is underway, with a historic rise in local investment and increased exit activity marking a maturing and more sustainable ecosystem.
Last year, funding for African startups surpassed $2 billion, returning to pre-pandemic levels. This growth is evident in the notable investments made in startups like Moniepoint, Moove, and TymeBank, from Uber, Google, and Nubank, respectively.
One of the standout funding rounds was Interswitch's $1 billion raise in 2019, led by Visa, adding to its total of over $300 million. Other investors included Helios Investment Partners and Leapfrog. Fast forward to 2024, Moniepoint secured $110 million in Series C funding, bringing its total funding to over $220 million. Investors included QED, Development Partners International, Google's Africa Investment Fund, and Lightrock.
MNT-Halan, an Egyptian financial super app, has raised over $500 million in equity and debt financing. Investors include Chimera Investments, Apis Growth Fund II, and Development Partners International.
The trend towards greater local investor participation is evident. In Q1 2025, local investors outpaced foreign ones for the first time in startup participation, signalling a turning point where local capital is becoming a principal driver of startup growth across the continent.
Key funding features include the rising role of local investors, increasing exit activity, geographic hotspots, government initiatives, and a growing pipeline of unicorns and soonicorns, particularly in fintech and agritech sectors.
Some African startups have achieved unicorn status, though explicit recent names were not detailed. The ecosystem's growth and increasing funding rounds imply a rising number of such high-value startups. Notable examples of companies providing strong investor returns include Moniepoint and OmniRetail.
However, signs indicate that 2025 will follow the cautious trends seen over the past two years in African startup funding. High-profile closures of well-funded startups, such as mobile commerce platform Copia and agri-focused data analytics firm Gro Intelligence, were observed. Startup failures are now occurring in growth-stage and late-stage startups, such as Ghanaian fintech Dash and Nigerian biotech 54gene in 2023.
Despite these challenges, the African startup landscape continues to thrive, with companies like Yoco, Clickatell, M-KOPA, TymeBank, Wasoko/MaxAB, PalmPay, Kuda, and Flutterwave raising significant funding. Each of these companies is making a mark in their respective sectors, contributing to the continent's growing digital economy.
- Cross-border payments are seeing a boost with the rise of mobile money services, such as Moniepoint and MNT-Halan, which have attracted venture capital from international investors like Google's Africa Investment Fund and Visa.
- Despite some high-profile startup failures, the African finance sector, particularly fintech and agritech, continues to attract significant investment, with companies like Yoco, TymeBank, and OmniRetail securing large funding rounds.
- In the general-news realm, a shift is observed in African startup ecosystems, with a trend towards greater local investor participation, as seen in the Q1 2025 data, where local investors outpaced foreign ones for the first time.
- Sports and lifestyle sectors may soon witness transformation through innovative startups, as the continent's burgeoning digital economy expands, driven by venture capital, technology, and government initiatives, leading to a growing pipeline of unicorns and soonicorns.
