Investors Abandon Nigeria, Pick Another African Country With $2.2 Billion Investment
- Kenya has overtaken Nigeria as the country with the most startup investment in 2024
- A new report said the country attracted more funding for its startups in the outgone year as total Investment in Africa hit $2.2bn
- A report said that Nigeria attracted $410 million in the review period, with $587 million raised in West Africa
Legit.ng’s Pascal Oparada has reported on tech, energy, stocks, Investment, and the economy for over a decade.
Startup investors signed more deals with Kenyam founders than Nigerian entrepreneurs in 2024.
East Africa attracted more funding in Africa with $755 million, with Kenya accounting for 88% of the deals.
Source: Getty Images
Nigeria attracted a mere $410 million in startup investments
According to a report by an insight data firm, Big Deal, African startups raised $2.2 billion in equity, grants, and exits in the past year, a 25% decline from the $2.9 billion generated in the previous year and a 53% drop from $4.6 billion raised in 2022.
Nigeria attracted $410 million in the review period, with $587 million raised in West Africa.
The data firm disclosed that 188 African firms raised $1 million or more in the outgone year, 10% less than they did in 2023.
Most of the investments in 2024 were in the last six months of the year, with the first half declining.
The development represents a 31% drop relative to the second part of 2023 and a 57% drop relative to the year's first half in review.
The rebound in the later part of 2024 was startups raising $1.4 billion, making the second-best since the beginning of the funding drought in mid-2022.
The top investments on the continent include two deals with Moniepoint, Nigeria’s payment platform, and Tyme Group in Q4 2024, which became unicorns.
The top startup funding destinations in Africa
Further breakdown of the funding shows that Egypt raised $400 million, with financing for North Africa dropping by 22% to $478 million.
South Africa attracted $394 million, with funding falling 18% to $397 million.
Investment experts say the decline in African firms shows broader global economic trends, including rising interest rates and tightened venture capital markets.
Others say that investors are looking elsewhere following the AI boom.
Nigeria is experiencing a funding drought
BusinessDay reports that Davidson Oturu of Nubia Capital, a US-based venture capital firm, said 2024 was sluggish for startups due to a funding correction.
Another investor stressed that investors favour sustainable startup models generating revenues.
The drought in startup funding in Nigeria shows more significant issues, with Kenya overtaking it as the country with the highest private equity deals in 2023.
Another report disclosed that Nigeria managed to attract 23% of investments in Q3 of 2024 as private capital flowed to South Africa and Kenya.
Google, and others invest $110m in Moniepoint
Legit.ng previously reported that Moniepoint raised $110 million in equity funding to achieve unicorn status.
Top investors include Development Partners International (ADP), which led the Series C funding.
Other new investors include Google’s Africa Investment Fund Verod Capital and Lightrock, an existing investor.
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Source: Legit.ng
