In a groundbreaking revelation from ‘The Big Deal,’ a renowned startup database, Kenya has emerged as the leading investment destination for startups in Africa, outshining formidable contenders like Nigeria, South Africa, and Egypt.
The report discloses that in 2023, Kenyan startups secured a substantial investment of nearly Ksh126 billion ($800 million), constituting an impressive 28% share of the total funding infused into the African entrepreneurial landscape.
Kenya has solidified its position among the top four players in the African startup ecosystem, displaying remarkable resilience and competitiveness against larger economies such as Nigeria and South Africa.
“With just under $800m raised in 2023, Kenya attracted the most funding, 28% of the continent’s total,” states the report.
Kenya’s leadership extends to the East African region, particularly in securing investments exceeding $100,000, positioning the country at the forefront of entrepreneurial funding within the specified timeframe.
The report also highlights Kenya’s increased share of Eastern Africa’s funding, growing from 86% in 2022 to an impressive 91% in 2023, even with a -25% year-on-year decline.
Contrastingly, Nigeria, traditionally a leader in African startup funding, experienced a setback in 2023. Despite having the highest number of startups raising $100,000 or more (146, 29% of the continent), total funding plummeted by 67% to $410 million. This led to Nigeria’s share of Western African funding dropping to 68%, the lowest among the ‘Big Four’ since data collection began in 2019.
Meanwhile, Egypt, with the fewest startups (48) among the ‘Big Four’ raising $100,000 or more, claimed the second spot due to a modest year-on-year decline (-20%). Egypt’s share of North African funding surged from 72% in 2022 to an impressive 95% in 2023, attributed to significant fundraising by MNT-Halan and challenges faced by Algeria and Tunisia.
South Africa maintained its dominance in regional funding, securing a remarkable 97% share and amassing $600 million. In a unique aspect among the ‘Big Four,’ South Africa experienced a notable 8% year-on-year increase, signalling a robust and expanding startup ecosystem. The contribution of 70 South African startups raising $100,000 or more accounted for 21% of the continent’s total funding.