Kenya beat South Africa, Egypt, and Nigeria to become Africa’s leading destination for startups investment, according to a report by Africa: The Big Deal.
According to the report published by the startup database; Kenyan startups attracted just under Ksh126 billion ($800 million) in 2023- accounting for 28% of the total funding invested in Africa.
This, however, was a drop in the total investments compared to the $1.1 billion dollars channeled to Kenyan startups in 2022.
Despite a 25% drop in investments, Kenya maintained its place as the leading investment hub and accounted for 86% of the total investments channeled to the East Africa region.
As per the report, Kenya also led in the category of countries with the most investment exceeding $100,000 in the East African region during the period.
“With just under $800m raised in 2023, Kenya attracted the most funding, 28% of the continent’s total,” the statement read.
“While it suffered a decline (-25% YoY), its share of Eastern Africa’s funding grew from 86% in 2022 to 91% in 2023.
How Other Countries Performed
On its part, Egypt had 48 ventures that raised $100k or above in 2023, the lowest number out of the Big Four.
However, the North African country came in second after Kenya thanks to its moderate decline in terms of the investments made in 2022 vis’a vis those made in 2023.
“But thanks to a YoY decline (-20%) more moderate than Kenya and most importantly Nigeria, it was enough for the country to claim the second spot,” the report read.
As per the report, Egypt continued its dominance in North Africa, beating other destinations in the region including Algeria and Tunisia with a substantive margin.
On its part, South Africa had the largest share of regional funding remains the which stood at 97% of the total investments made in the South African region in 2023.
At the same time, there were over 70 start-ups who raised $100k or more in the country which cumulated to $600m in funding, a 21% of the continent’s total.
In addition, South Africa was the only one of the Big Four not to see its total funding shrink between 2022 and 2023 (+8% YoY).
Elsewhere in West Africa, Nigeria remained the country with the highest number of start-ups to raise $100k or more (146, 29% of the continent).
However, the country registered the high variance in terms of total investment made in 2022 compared to 2023.
The total value of investment to the West African country in 2023, the report states, stood at $410m, which was way down compared to the $1.2b in 2022, and $1.7b in 2021.
Also Read: List of Startups That Began Operations in Kenya in 2023
“As a result, its share of Western African funding continued to drop to reach 68%, down from 85% in 2021, and 77% in 2022,” added the report.
Kenyan Startups Maintain Big Four Status
Based on the report, Kenya has maintained its big four status in the African startup ecosystem, competing with bigger economies including Nigeria and South Africa.
Also Read: 5 Kenyan Startups Handpicked in Ksh150 Million Competition
The Kenyan startup ecosystem is diverse comprising companies interested cash transfer solutions, e-commerce, e-Health solutions, and electric mobility.
However, it has not always been a smooth ride for the startups, with some struggling to remain afloat even after securing significant fundings.
