Startups get $16m funding in November
TECHDIGEST – Only $16m of startup funding was announced in November, the lowest since June 2021, the ‘Africa: The Big Deal’ report has shown.
The report which monitors deals over $100,000, disclosed that despite having a great first half of the year, which spilt into the second half, things were quiet on the investment front in November. It stated that startups must raise $534m in December to beat the amount raised in 2021.
It said, “In Nigeria, after an incredible H2 2021, and a very strong H1 2022, H2 2022 has been much quieter. In November, only $16m of funding was announced, the lowest monthly number since June 2021.
“While Nigeria keeps the lead in absolute numbers this year (almost $1.2bn), the ecosystem would have to raise $534m in December to top its 2021 performance, as much as it raised in the past 7.5 months combined. It is, therefore, extremely likely it will record a YoY decline in funding in 2022.”
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According to the report, while funding has slowed generally on the continent, certain markets are still closing big funding raises with Algeria’s Yassir’s $150m Series B as a recent case study.
Among Africa’s big four — Nigeria, South Africa, Egypt, and Kenya — funding into South Africa has been poor this year. The country has only been able to raise about half of the funding it attracted in the same period in 2021.
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It explained, “Talking of decline, as of the end of November, South Africa had only raised about half of the funding it had raised at the same time last year.
“It would also take over half a billion dollars of funding announced in December – more than startups in South Africa have raised this year so far – to reverse the trend. It doesn’t help that November last year was quite exceptional with two nine-digit rounds announced (Jumo and MFS Africa).
It projected that this year would end with a double-digit decline in terms of funding, noting that things looked much rosier for Egypt though, where funding raised in 2022 has tracked over the 2021 levels, month after month.
“By August, start-ups in Egypt had already raised more than they had in the whole of 2021 ($600m+), and they have now exceeded this number by 38 per cent.
“Egypt has definitely emerged as one of the winners of 2022, especially as it was hit less badly than other ecosystems by the H2 slump,” it declared.
It added that while it has been coasting in H2, Kenya has had such a strong start of the year that it had topped 2021 numbers by March, and had recorded 2.5 times YoY growth between 2021 and 2022, projecting that with just a little push, and it could cross the $1bn mark.
“It is worth noting though that Kenya is really playing catch-up after a disappointing 2021: with -24 per cent YoY, it was the only one of the big four to suffer a decrease in funding raised between 2020 and 2021, while its three peers were growing – exploding rather – by a factor of 4x to 5x.”
The report further stated that funding overall has grown outside of the big four, +42 per cent YoY already.
