• 'Seismic' changes in Africa's venture capital scene propelled Kenya to the top
• East Africa surpassed other regions, hinting at a broader shift in investor focus
Image: HOPE MUKAMI
Kenya continued its impressive investment run for the third consecutive semester in the first half of 2024, hauling in $244 million (Sh31.4 billion) in startup funding.
In the review period, the East African nation captured almost a third (32 per cent) of all funds raised by startups in Africa, according to the startup tracker Africa: The Big Deal.
Kenya's share of total funding grew by 5 percentage points compared to 2023 as other 'Big Four' markets Nigeria, South Africa and Egypt struggled.
In East Africa, Kenya accounted for 86 per cent of the region’s total funding, down slightly from 89 per cent in 2023 while overall, the region led the continent by attracting 37.5 per cent ($285 million) of total venture capital.
Uganda was the only other East African nation to surpass US$10 million, raising US$19 million, while Tanzania narrowly missed this threshold with US$9 million. The remaining countries, including Sudan, Ethiopia and Rwanda, each garnered less than $5 million.
Nigeria emerged as the second most attractive market for VC funding, securing $172 million, which equates to 23 per cent of Africa's total.
This marks a significant rebound from its 14 per cent share in 2023, propelling the continent's most populous nation from fourth to second place.
Despite the recovery, Nigeria has not reclaimed the top spot it held in 2021 and 2022. As a region, West Africa closely followed East Africa with $270 million in funding, representing 35.5 per cent of the continent’s total.
However, Nigeria's share of regional funding was lower at 64 per cent, down from 68 per cent in 2023. Benin attracted $50 million through a single deal (spiro), while Ghana and Senegal raised $29 million and $11 million respectively.
Historically, Nigeria has raked in the lion's share of Africa's startup funding, a testament to its large population, entrepreneurial spirit and significant market potential. South Africa, Kenya and Egypt make up the rest of the "big four" investment destinations on the continent.
Kenya's and East Africa's successful fundraising trend could be signalling a shift in investor interest outside the traditional market leader.
Investors might be recognising the burgeoning opportunities in East Africa, driven by robust economic policies, growing tech ecosystems and increasing digital adoption across the region.
Egypt ranked third in the survey, with $101 million in funding, though its share of the continent's total dropped significantly to 13 per cent in H1 2024 from 22 per cent in 2023.
Nonetheless, Egypt still attracted 87 per cent of Northern Africa's total funding, similar to the previous year.
Morocco was the only other Northern African country to exceed $10 million in startup investments, raising $14 million. Tunisia and Algeria saw limited startup activity since 2023, a stark contrast to their stronger performances in 2021 and 2022, driven largely by Algeria’s Yassir.
South Africa fell to fourth spot, raising $85 million, which accounted for 11 per cent of Africa's total startup funding in H1 2024, down from 21 per cent in 2023.
Despite this decline, South Africa continued to dominate its region, accounting for 98 per cent of funding, up from 96 per cent in the previous year. This regional total represented 11.5 per cent of all the funding on the continent.
Meanwhile, the report highlights that 22 African countries recorded at least one deal exceeding $100,000 in H1 2024.