H1 2023 Africa Investment Report
A changing funding environment
At the conclusion of the first half of 2023, capital infusion into Africa’s startups surpassed an impressive milestone, exceeding the $20 billion mark over a span of 15 years. This is indeed a landmark, but it comes at a time when many in the investment and innovation ecosystem are asking what the future of investing in Africa looks like. Over the last year, we have observed a significant change in the funding environment putting pressure on startups and investors alike. Many startups have needed to shut down, while many funds have struggled to meet their target closes. Others have been forced to take write-downs on their valuations and make deep cuts to their teams. When accounting for the few mega-deals this year, deals valued at $100m or more, startup funding in Africa experienced a decline to $1 billion during the first Half of 2023, contrasting with the $1.5 billion in the second half of 2022 and $1.8 billion in the first half of 2022.
Not all is lost
Within the downturn we are seeing a shift in focus from the growth stage, where many startups are stuck with high valuations from the peak in 2021 and 2022, to the late and early stage. At the late stage, we have seen a handful of mega deals in fintech, logistics and climate tech which have driven the majority of funding volume in H1 2023. Further, we have seen a shift in the sector breakdown, with fintech losing some of its hold on both funding volumes and number of deals. The big four still account for the majority of funding, but markets like the DRC, Rwanda, Morocco, Ghana, amongst others are picking up momentum.
Making sense of changing venture capital and investment landscape in Africa
It’s against this backdrop, that Briter is excited to release its first mid year Africa investment report. The report has 5 sections:
Making sense of the year so far and looking at the investment trends for H1 2023
Where we are in the downturn, comparing H1 2021, 2022 and 2023
Looking more closely at when the downturn started
Exploring the opportunities and resilience in this downturn; and
Looking at the current key trends in the ecosystem and how they might play out for the remainder of the year