African startups crossed the one-billion-dollar investment mark in the first half of 2024 as mergers and acquisitions surged, reflecting a gradual rebound and sustained investor confidence despite tight global funding.
African startups raised over US$1.1 billion in funding in the first half of 2024, an uptick in investment activity on the continent. While this is an increase from the US$1 billion raised during H1 of 2023, it remains below the US$1.5 billion raised in the second half of 2022 and the US$1.8 billion raised in the first half of 2022.
This funding surge comes at a critical time when global venture capital is experiencing a significant squeeze, highlighting a resilient and promising African startup ecosystem.
According to figures from African startup tracker Wee Tracker, the first half of 2024 also witnessed a surge in African investment, with over US$1.67 billion committed through new funds. This highlights a gradual recovery of the continent’s venture capital scene amid a global funding squeeze.
Adenia Partners led the funding surge with its Adenia Africa Fund, which secured US$470 million. This fund, backed by investors such as Norfund AS, the US International Development Finance Corp., and Canada’s Findev Inc., aims to support innovative businesses across Africa in fintech, telecom, and healthcare sectors.
Other notable fund launches in H1 2023 included XSML Capital’s US$98.7 million African Rivers Fund IV, targeting Central and Eastern Africa’s entrepreneurial scene, and the US$3 million Glint Fund II by Glint, focused on ventures in Egypt.
Partech’s final closing of the oversubscribed Partech Africa II fund at over $300 million further exemplifies the confidence in African markets.
The fund plans to invest across the continent, offering initial tickets ranging from US$1 million to US$15 million for Seed to Series C rounds, supporting companies as they scale both locally and internationally.
The first half of 2024 also saw significant consolidation through major acquisitions. Lesaka, a prominent fintech company, acquired its counterpart Adumo in a deal valued at US$85.9 million.
“This comes just three years after Adumo acquired fintech startup SwitchPay in 2021,” noted Wee Tracker, highlighting Lesaka’s aggressive expansion strategy in the fintech sector.
Level Africa strengthened its position by acquiring Utilis Ventures, one of Uganda’s leading investment advisory firms.
This strategic move included rebranding Utilis Ventures to Level Africa Uganda Limited, enhancing its capability to serve clients investing in Africa with deeper local insights and expertise.
Kenyan travel booking platform BuuPass expanded its reach by acquiring QuickBus, a competitor in Nigeria and South Africa. This acquisition aims to leverage QuickBus’ partnerships with banks and telcos, offering a broader range of travel booking options through API integrations.
“As part of the acquisition, BuuPass branding replaced QuickBus within existing integrations, ensuring a smooth transition for Nigerian and South African users,” according to Wee Tracker.
Wee Tracker reports, “African startups have raised $1,129,592,550+ in funding so far.” These funding and acquisition activities indicate a robust and evolving African startup ecosystem, positioning it as a significant player on the global stage.
Strategic mergers and acquisitions have recently suggested a promising outlook for Africa’s entrepreneurial landscape.
The substantial investment and consolidation activities indicate a gradual recovery and strengthening of the continent’s venture capital scene.
Investors are increasingly recognising Africa’s potential and unique opportunities, paving the way for more innovation and sustained growth in the coming years.
Seth Onyango, bird story agency