Egypt leads as African startups raise $138 million in September

African startups raised $138 million via equity, debt and grants in September 2024.

This is according to the latest report by Africa: The Big Deal, which revealed that fintech startups got the larger chunk of the funding.

While this figure is slightly below the monthly average of $159 million recorded over the past year, the number of startups securing significant investments was notably higher.

The report noted that 61 startups successfully raised over $100k in funding during the month, a significant jump from the 12-month average of 42 startups.

According to Africa: The Big Deal, these ventures spanned 12 countries, with 90 per cent of the total funds going to the Big Four: Egypt, South Africa, Nigeria, and Kenya, along with Ghana. The other countries represented in the report include Morocco, Algeria, Tunisia, Côte d’Ivoire, Tanzania, Uganda, and Rwanda.

Among the top fundraisers, three startups stood out with major investments exceeding $20 million. Egypt-born and Abu Dhabi-based fintech, FlapKap, secured the largest deal of $34 million in pre-Series A funding, a combination of debt and equity.

Another Egyptian fintech, Paymob, raised $22 million as an extension to its Series B round, with the company now reporting profitability in its home market.

In Ghana, Fintech Company, Fido raised $20 million in Series B equity funding, following the $10 million debt it announced in August.

In terms of exits, two notable acquisitions were announced. South African AI financial reporting platform Syft was acquired by global accounting software giant Xero for $70 million, marking the largest exit of the month.

Nigerian fintech Risevest acquired Kenya’s Hisa, as part of its strategy to expand into the Kenyan market.

Recall that the funding dropped significantly in August by about 87 per cent. It went down from $443 million recorded in July to $56 million a month after.

Africa: The Big Deal said, “start-ups in Africa announced only $56 million in funding, down from $443 million in July (8x less) and $234 million in August 2023 (4x less), making August 2024 the second-slowest month in four years in terms of funding raised, after June 2024 ($42 million).”

It disclosed that most of the funding was raised as equity (87 per cent), the rest was debt (nine per cent) and grants (four per cent). The data showed that Nigeria accounted for 14 per cent of the $56 million raised in August 2024.

However, the research firm earlier reported that from the about $800 million funding raised in the first half of 2024, startups funding hit the $1 billion mark in July.

Africa: The Big Deal said things happened a little faster than expected through two mega deals announced since the middle of the month. This includes the d.light’s new $$176 million securitisation facility and MNT-Halan’s $157.5 million raised to fuel their expansion.

“If we add NALA’s $40 million Series A from earlier this month and other smaller deals, we’re getting very close to $400 million, which will make July 2024 the most successful month in terms of fundraising in Africa in more than a year and represents more than what was raised in the whole of Q2 2024,” it stated.

According to the report, the pace of investments has not yet fully picked up compared to the past three years (the $1 billion mark was reached in May 2021, in April 2023 and as early as February 2022.

“This news is encouraging as it shows that 2024 might in the end deliver stronger results than 2019 and 2020 it is often benchmarked against (and when the $1 billion mark was only reached in November). Start-ups in Africa have already raised more funding than they had in 2020,” it stated.