A recent study reveals a substantial 65.83% year-on-year decrease in foreign investments in Nigerian startups, plummeting from $1.2 billion in 2022 to $410 million in 2023. This decline caused Nigeria to lose its leading position in terms of total startup investments on the continent, yielding the top spot to Kenya.
Kenyan startups secured just under $800 million in 2023, claiming the number-one position in Africa. Nigeria finished the year at number four, behind Kenya, Egypt, and South Africa. The analysis conducted by research firm ‘Africa: The Big Deal’ focused on startup funding amounts of $100,000 and above in 2023.
The study also highlighted the continued dominance of the “Big Four”—Kenya, Egypt, South Africa, and Nigeria—which attracted 87% of the total startup funding on the continent, marking their largest share since 2019.
While Nigeria still led in terms of the number of startups raising $100,000 or more (146, constituting 29% of the continent), the total funding amount experienced a dramatic year-on-year decrease of 67%, falling to $410 million from $1.2 billion in 2022 and $1.7 billion in 2021.
As a consequence, Nigeria’s share of Western African funding dropped to 68%, down from 85% in 2021 and 77% in 2022—the lowest regional share among the Big Four since data collection began in 2019.
Despite a 25% year-on-year decline, Kenya managed to secure nearly $800 million in 2023, claiming 28% of the continent’s total funding. In Egypt, with the lowest number of startups (48) among the Big Four raising $100,000 or more, the country secured the second spot on the continent, raising $640 million, benefiting from the overall decline in Kenya and Nigeria.