The H1 2023 Africa Venture Investment Report examines how the impact of the economic challenges are materializing further on the venture capital ecosystem of the continent.
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Although economic growth in Africa varies among its different sub-regions, the persistent inflation driven by rising food and energy prices, along with weaker currencies and limited investment growth due to rising interest rates and growing liquidity crunch, continue to hinder African economies pushing them to further decelerate this year. Moving forward into 2023, this situation continued to create a high level of uncertainty among investors thus impacting investment sentiment globally and across the continent.
With all these events in place, it is evident that Africa's VC landscape is navigating through a challenging period, where global economic conditions, inflation, and investment dynamics intersect to shape a complex environment.The persistent sluggishness of the global economy has had a pronounced impact on the venture capital landscape in Africa during 2023. The first half of 2023 experienced a significant 54% annual decline in funding, with deals reaching only half the number recorded in H1 2022.When examining the individual months of 2023, it becomes clear that each month from January to June witnessed a year-on-year contraction of more than 30% compared to the same period in 2022. The only exception was February, where funding declined by a mere 8%, primarily due to a single noteworthy deal exceeding $100M. This transaction was closed by Egypt's Halan, making it the standout deal of the period.
The persistent grip the VC space has seen on Africa is strongly reflected in the number of VC deals conducted in the top transacted African countries, including Nigeria, Kenya, South Africa, and Egypt. All of these countries experienced a double-digit yearly decline in VC deals during the first half of 2023. On average, the top three countries in terms of deals witnessed a 35% annual decline. Nigeria maintained its position as the most active country in terms of deal volume. However, there was a significant 54% drop in the number of transactions closed, highlighting the increasingly difficult funding landscape.
In the first half of 2023, the top three African countries experienced a 26% year-on-year decline in funding. Among them, Egypt stood out with $305 million in funding, which remained relatively stable compared to the same period last year. Egypt accounted for the largest share of Africa's funding, capturing 32% of the total. However, when excluding the impact of a significant $260 million deal closed in February, the reality becomes different, revealing an 85% yearly decline in non-MEGA deal funding in H1 2023. Overall, Egypt's funding landscape and economic conditions reflect the challenges faced by the country, with lower deal volumes and a struggling business environment impacted by rising costs and sluggish demand.
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What’s In The Report?
The latest quarterly report offers strategic insights into Africa's performance. This report covers a 5-year analysis of Africa's venture funding evolution, with a specific focus on the country comparison and industry performance in 2023. You will get access to precious information such as:
Africa Venture Funding Evolution: Get a detailed analysis of the past five years, highlighting the growth and development of venture funding in Africa with a focus on the performance in 2023.
Key rankings such as the Top 20 investors, Top 20 funding rounds, Top 10 last exits, and 5-Year exit evolution of Africa.
Who is it for?
Whether you’re a private investor, a VC, an investment company, a CVC, or working in corporate, this report gives an overview of the ecosystem and caters to a diverse audience including any curious minds who want to use the yearly, quarterly and monthly charts in this report to track investment activity.
You can also see in which country and industry the investment activity focused in terms of deals and capital deployed, allowing you to leverage insights and make wise choices.
The report can also be used by consultants looking to identify technology innovation trends and who will find it valuable to look at the evolution of M&A activity and concentration of acquirers/acquired startups.
Last but not least, government entities searching for investment opportunities will also find valuable information to make informed decisions.
Where is this information from?
The report was 100% created using data from MAGNiTT. MAGNiTT is the leading VC verified data platform and offers a comprehensive directory of technology innovation trends. Our unique SaaS solution includes investment directories listing startup venture funding across the Middle East, Africa, Pakistan, and Turkey, and now Singapore. By using MAGNiTT, you will also get access to market sizing tools to visualize investment growth and trends across various industries, geographies, and stages, as well as comparison tools for benchmarking geographies, industries, and investor performance. Furthermore, MAGNiTT offers exit comparisons by examining mergers and acquisitions.
Learn more about MAGNiTT's Data Methodology.