Tech research firm, The Big Deal, highlights 2023 as a distinctive year for African entrepreneurs, as investments diversified across the principal tech markets of Egypt, Nigeria, Kenya, and South Africa.
Previously, Nigeria received the largest segment of startup investments, but in 2023, Kenya outstripped the West African nation, bagging the highest tech funding in Africa.
The study indicates that Kenyan entrepreneurs raked in just under $800 million, clinching the top position in Africa.
“Kenya attracted the most funding in 2023 at just under $800 million, making up 28% of Africa’s total,” the firm acknowledged. “Although there was a 25% YoY decrease, its portion of Eastern Africa’s funding grew from 86% in 2022 to 91% in 2023. During this period, 93 startups each raised $100,000 or over, contributing to 19% of Africa’s total”.
Kenyan President, William Ruto, broadcasted the surge in financing on X, attributing it to the strategic alterations improving Kenya’s economic environment.
“Our strategic reforms have enhanced the business climate, rendering Kenya an ideal investment destination. This accomplishment reflects our commitment to fostering innovation and economic advancement. This significant funding is fostering new ideas, advancing technology and boosting job creation,” he expressed.
In 2023, Nigerian entrepreneurs experienced a substantial decrease in investment, with funds dipping by 65.83% YoY to $410 million, down from $1.2 billion in the preceding year.
“Nigeria underwent the most drastic shift in 2023. Although it still had the highest number of firms to secure $100k or more (146, or 29% of the continent), the amount secured plummeted by two-thirds (-67%) to total $410 million, against $1.2 billion in 2022 and $1.7 billion in 2021,” the research firm commented.
Hence, its share of Western African funding shrunk to 68%, a decline from 85% in 2021 and 77% in 2022. This is the smallest regional share for any major market since they began collecting data in 2019.
Among the big four, South Africa was the only country to not witness a reduction in its overall funding, experiencing an 8% YoY increase between 2022 and 2023.
