African Start-Ups Hit Lowest Monthly Funding in Two Decades: International Edition

A recent report shows that start-ups across Africa received $50 million in funding in March, marking the smallest monthly total since the latter part of 2020.

As highlighted in "Africa: The Big Deal," a report concentrating on the startup ecosystem across the continent, there has been a reduction in funding for startups since February, with the situation becoming more challenging in March.

The start-up ecosystem began the year strongly, securing nearly $300 million in funding during January. However, this figure dropped to around $119 million in February before plummeting significantly to just $50 million in March. According to Africa: The Big Deal, this represented "one of the lowest monthly totals since late 2020."

Even though the figures were disappointing, the count of startups reporting funding remained consistent with earlier months; however, there weren’t any announcements of deals exceeding $10 million.

Each quarter, startups secured $460 million in Q1 via investments of over $100k each (excluding exits), which is less than the $486 million recorded in Q1 2024, reflecting a year-over-year decrease of 5%. Additionally, the figures reveal that Q1 2025 marks the second-least funded quarter for startups since the end of 2020.

The report stated, "As anticipated, 83 percent of the funds were allocated to the Big Four countries. Kenya, Nigeria, and South Africa garnered approximately $100 million each in funding (constituting 24 percent, 24 percent, and 22 percent of the total, respectively), trailed by Egypt receiving $61 million (which makes up 14 percent). The list was rounded out at fifth place by Togo, largely due to Gozem securing a $30 million Series B financing round."

Approximately 46 percent of the funds were gathered by fintech startups ($53 million for LemFi, $38 million for Naked, etc.), trailed by energy with 18 percent and logistics & transportation with 10 percent.

In terms of diversity, only slightly more than two percent of the funds were secured by female CEOs, amounting to approximately $10 million. The biggest contribution in this category was a $6.2 million grant awarded to South Africa’s biotechnology firm, African Biologics.

The report continued, "Should grants be excluded from the overall figure, the proportion of financing secured by women CEOs in Q1 2025 would drop to 0.7 percent. Ultimately, 79 percent of the funds were allocated to solo male entrepreneurs (11 percent) or all-male founding groups (68 percent)."

“Diverse founding teams attracted 20 per cent of the total – which isn’t great but is not a bad performance compared to previous quarters. A mere one per cent was invested in solo female founders or female-only founding teams.”

Provided by SyndiGate Media Inc. Syndigate.info ).