A Market Map of funded startups in Africa in the first quarter of 2023 showing funded startups in each country, 8-quarter funding evolution of venture capital in the country, and the top five rounds of the quarter.
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The African VC ecosystem raised $561M across 113 deals in Q1’23 making it the lowest quarter of deals since Q2’20 and the lowest funded quarter in terms of non-MEGA deals since Q1’21. Data from Q1 indicates that the deceleration trend, which impacted the continent during the latter part of 2022, backed by the challenging global environment, is now evident.The funding landscape this year has been primarily buoyed by a single significant $260M deal concluded by Egypt’s Halan. When excluding the influence of this $100M+ round, funding has experienced a 5% decrease, and deals have contracted by 29% compared to Q4.
At the level of countries, despite notable changes in trends during the first quarter of the year, the "Big Four" remained the dominant players in the African VC ecosystem. An interesting shift occurred as South Africa surpassed Nigeria and Kenya to become the second-most funded region on the continent. Egypt, fueled by a $100M+ funding round, maintained its position as the top-funded geography. South Africa's thriving technology sector is promising due to its strong economic stability, making it one of the most economically sound countries in the region. In terms of deals, Nigeria and Kenya, widely recognized as the prominent technology hubs in Africa ranked in the top positions. Nigeria closed the biggest numbers of deals with its total number of 35 funded startups in the first quarter of 2023 reigning over other countries of the continent.
The top five rounds closed during the first quarter of 2023 captured 65% of the total funding raised by the continent. Following Halan’s deal, remaining top five deals were all between $20M and $35M. Two out of the five deals were for FinTech startups, namely those of Halan and Lulalend. Interestingly, Madagascar’s energy-focused startup WeLightAfrica ranked fourth.
Halan - $260M
MNT-Halan is Egypt’s growing lender to the unbanked. Founded in 2018, the company is headquartered in Cairo, Egypt. MNT-Halan was created to digitally bank the unbanked and substitute cash with electronic solutions. In the first quarter of 2023, Halan closed the only MEGA deal for Africa worth $260M and backed by Chimera Capital.
Lulalend - $35M
Lulalend is a South African-headquartered online lending company that provides fast and easy working capital funding to small businesses. In February 2023, the startups closed the second highest deal for the continent valued at $27M, with contribution of investors like Triodos Investment Management, Lightrock, Women’s World Banking Capital Partners, IFC, DEG Invest, Quona Capital.
Carry1st - $27M
Carry1st is a South African gaming startup and is the leading publisher of social games and interactive content in Africa. In January 2023, Carry1st closed the second biggest deal for the continent worth $27M and backed by investors.
WeLightAfrica - $21M
WeLight enables access to clean energy 24 hours a day in rural areas in Africa by deploying a unique and innovative model of solar mini-grids. The Madagascar-based startup closed a deak worth $21M in January 2023 and landed among the top five highest funded startups in the continent.
Smile Identity - $20M
Nigeria’s Smile Identity provides the best Africa-focused solutions for real time Digital KYC, Identity Verification, User Onboarding, Document Verification, Liveness Checks, Face Verification, Anti-fraud, Know your Business (KYB), and Identity Data Deduplication across Africa. The startup closed a $20M deal backed by regional and international investors.
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