- African startups raised a total of $675m in February 2023, with South Africa, Kenya, Nigeria and Egypt continuing to dominate the region.
- Fintechs and payment platform solutions took the lion’s share of the funding at 84%, but healthcare startups came in second.
- Debt financing was seen as a growing trend, and while a number of countries including Rwanda, Morocco, Zambia, Botswana and Tanzania had startups involved in funding, most African countries were not involved.
According to data gathered by Intelligence by Techpoint, a total of 44 African startups raised a whopping $675 million funding in February 2023 alone. The report, shared by Techpoint Africa shows that startup behaviour on the continent is not really changing.
For example, majority of the startups are headquartered in just four out of the 54 countries in Africa with South Africa and Kenya accounting for 10 each and nine coming out of Nigeria and six from Egypt.
This means that just nine were from countries not considered the major tech hub of the continent. The concentration of startups in these four nations continue to leave the others out of the discussion.
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Also, the data showed that Africa got its first unicorn since Chipper Cash achieved the status in November 2021 after Egypt’s MNT-Halan raised $400 million to become a billion-dollar company.
Another worrying aspect of the report was that fintechs and payment platform solutions continue to command the bulk of financing, raising $572.9 million or 84% of the funding. You’ll recall that this is the problem CC Hub is attempting to rectify after it announced a $15 million fund scheme for edtech startups. However, healthcare startups raised the second most funding in February 2023 in Africa.
One interesting trend observed is that more African startups are embracing debt financing than before, this differs from equity financing as the lenders don’t get a share of the business, instead the borrower pays back the ‘loan’ at an agreed upon date.
Other countries like Rwanda, Morocco, Zambia, Botswana, and Tanzania also brought startups to the funding table.
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