Techpoint Africa has recently released a report containing funding data for startups in Q1 2023. According to the report, African startups raised $830.6 million in Q1 2023, a huge step down from the $1.52 billion recorded by the end of Q1 2022.
The data suggests that African startups might be experiencing the impact of a funding slowdown that commenced in 2022.
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Despite being the country with the highest number of funded startups in Africa and the best-funded one, Nigeria experienced a significant decline in Q1 2023, with only $44.1 million raised. In terms of the amount raised, Nigeria ranked lower than Egypt with $450.4 million, South Africa with $205 million, and Seychelles with $50 million. This indicates that Nigeria had its worst Q1 performance since 2020 when it secured $55.37 million. Nigerian startups raised $219 million and $566 million in Q1 2021 and Q1 2022, respectively. Startups in Kenya were also impacted by funding, having raised just $36.7 million in Q1 2023.
In terms of deal count, Nigeria is at the forefront, having recorded 18 deals in the first quarter of this year, which is the same number it recorded in Q1 of 2021. On the list, Egypt takes the second spot with 11 startups receiving funding.
Once again, fintech startups have taken the lead in fundraising, having raised $584 million, which is more than 10 times the combined amount raised by the next two sectors, namely blockchain, and healthcare.
MNT-Halan, a fintech company based in Egypt, became the country’s first unicorn after securing $400 million in equity and debt financing, the highest funding recorded during the period.
Q1 2023 has seen an acquisition taking place every month, with the gaming industry experiencing two surprising acquisitions. GBarena, an Egyptian startup, acquired Galactech, a Tunisian startup, while Carry1st, a Nigerian startup, acquired Gebeta. CrowdForce, Thuthukani, and Fluidcoins were acquired by FairMoney, Fin, and Blockfinex, respectively, in the fintech sector. Additionally, the biggest acquisition in this period was the acquisition of InstaDeep by BioNtech. In March, Evercare Hospital finalized the acquisition of Doctoora, an online healthcare delivery platform, adding to the list of acquisitions that have taken place during this period.
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Male-only founding teams raised an impressive $681.6 million, while mixed-gender teams raised $133.4 million. On the other hand, all-female teams managed to raise only $15 million, which is significantly lower. Likewise, startups with two co-founders received the highest funding amount of $617 million, while those with three founders received $172 million during Q1 2023.
