2024

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Frontier

The impressive run of startup funding witnessed in September has proven pivotal as African startups raised $600 million in the third quarter of 2024. This was revealed in a report by the African startup funding analytics company, Africa the Big Deal. The numbers which include equity, debt and grants, and exclude exits, mean Q3 now has the largest quarterly raise of the year. 
The $600 million raised during the quarter is a significant improvement from the previous quarter, dwarfing the $300 million raised in Q2, 2024 which is the poorest funded quarter so far. This represents an astounding 100 per cent quarterly increase. The Q3 total is also above the $5 billion investment attracted in the first quarter of the year. 
The numbers are also quite impressive compared to the corresponding quarter of the previous year (Q3, 2023) when African tech startups attracted around $500 million. This indicates a 20 per cent year-on-year increase. 
“Last quarter start-ups in Africa raised&nbsp;over $600m&nbsp;in funding (equity, debt, grants; excluding exits), more than twice as much as in Q2; the best quarter this year so far; and on par with Q3 2023 numbers,” the report stated. 
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<h4 id="q3-startup-funding-powered-by-d-light-mnt-halan-and-42-others" class="wp-block-heading">Q3 startup funding powered by d.light, MNT-Halan and 42 others</h4> 
The impressive third-quarter startup funding was powered mostly by 44 startups which raised at least $1 million each during the quarter. This was a significant 15.7 per cent increase compared to the previous quarter when 38 startups attracted over $1 million in funding during the quarter. 
But the quarter did not fare too well in this regard compared to the same period in the last year when 48 startups attracted $1 million dollars or more, indicating an 8.3 per cent drop. 
While as many as 44 startups may have attracted more than $1 million during the third quarter of 2024, it ultimately came down to two major funding announcement to drive the really impressive quarterly total. The first is d.light, a global provider of transformational household products and affordable finance for low-income households, <a href="https://technext24.com/2024/07/17/d-light-176m-to-provide-affordable-solar/#google_vignette">which closed a $176 million investment in July</a>. 
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 d.light
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Powered by social impact-focused asset management company,&nbsp;African Frontier Capital, the securitisation facility which was in multi-currency, was aimed at enabling access to reliable, renewable energy for an estimated six million people across Kenya, Uganda and Tanzania over the next three years. 
The other major startup funding announcement was Egyptian financial technology company, <a href="https://substack.com/redirect/eeda6729-254d-4a7c-b3a8-e4bfd42b55a6?j=eyJ1IjoiYzRnaG0ifQ.De8qFOyMi_AE-D2WD0mrzLs6R2jEV-fYyq9lBjebf0w" target="_blank" rel="noopener">MNT-Halan</a> which continued its strong unicorn run with an impressive $157 million raise also in July. 
The round featured contributions of $40 million from the International Finance Corporation (IFC), with the remaining funds supplied by Development Partners International (DPI), Lorax Capital Partners, funds managed by Apis Partners LLP, Lunate, and GB Corp. With the funding, the unicorn hopes to power its imminent geographical expansion beyond its primary market. 
<h4 id="african-startup-funding-on-the-rise-despite-global-downturn" class="wp-block-heading">African startup funding on the rise despite global downturn</h4> 
African startup funding appears to be enjoying an uptick in sharp contrast to what obtains around the globe. According to reports, the global tech ecosystem witnessed a major slump in startup funding in the third quarter of 2024 as startups around the world were able to raise $54.7 billion. 
According to the report, the $54.7 billion raised between July and September was a far cry from the $68.1 billion raised by startups around the world in the preceding quarter (Q2, 2024), representing a significant 19.7 per cent decline. It is also way less than the $62 billion worth of investment attracted in the first quarter of the year, representing an 11.8 per cent decline. 
The total global startup funding attracted in the third quarter is also the lowest funding number recorded since 2020, falling below the $54.9 billion recorded in the fourth quarter of 2023 which was the previous lowest. Not even during the pandemic of 2020 did the global ecosystem witness such a decline as is recently witnessed, with funding figures going from $61.5 billion in the second quarter of 2020 to peak at $97.5 billion in the last quarter of that year. 
While the global startup ecosystem looks to rally, the African startup space would be looking to maintain its impressive rise and finish the year strongly. 
See also: <a href="https://technext24.com/2024/10/10/startup-funding-global-54-7bn-in-q3-2024/">Global tech startups raised $54.7bn in Q3 2024, the lowest quarterly funding since 2020 – Report</a>
The post <a href="https://technext24.com/2024/10/15/startup-funding-africa-raised-600m-q3/">Startup funding: African startups raised $600m in Q3, a steep rise despite global slump</a> first appeared on <a href="https://technext24.com">Technext</a>.

Startup funding: African startups raised $600m in Q3, a steep rise despite global slump

Technext.ng

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