The influx of foreign investments into Nigerian startups experienced a steep decline of 65.83% year-on-year, plummeting to $410 million in 2023 from its 2022 figure of $1.2 billion.
This downturn led to Nigeria relinquishing its leading position in total startup investments across the continent to Kenya.
During 2023, Kenyan startups surged to claim the top spot in Africa by raising just under $800 million. Consequently, Nigeria slid to fourth place in the rankings, losing ground to Kenya, Egypt, and South Africa, as per an analysis by ‘Africa:
The Big Deal,’ a research firm specializing in startup funding of $100,000 and above.
The dominance of the “Big Four” countries persisted in 2023, capturing a staggering 87% of the continent’s total startup funding.
Kenya, Egypt, South Africa, and Nigeria accounted for 71% (357 out of 500) of this share, marking their strongest hold since 2019.
Addressing Nigeria’s significant decline, the research firm noted, “Nigeria witnessed the most drastic change in 2023.
While still leading in the number of startups raising $100,000 or more (146, constituting 29% of the continent’s total), the total funding plummeted by two-thirds (67%) year-on-year to $410 million, compared to $1.2 billion in 2022 and $1.7 billion in 2021.”
Consequently, Nigeria’s portion of Western African funding continued to dwindle, reaching 68%, down from 85% in 2021 and 77% in 2022.
This represents the lowest regional share among the Big Four markets since data collection began in 2019.
Despite a 25% decline, Kenya managed to secure nearly $800 million in 2023, claiming the largest funding portion at 28% of the continent’s total. Egypt, with the lowest number of ventures (48) raising $100,000+, attained the second spot due to the declines in Kenya and Nigeria, securing $640 million.
The firm highlighted, “South Africa maintained the highest regional funding share at 97%. Seventy startups raising $100,000 or more amassed $600 million in funding, constituting 21% of the continent’s total.
Notably, South Africa was the lone Big Four country to witness an 8% year-on-year increase in total funding between 2022 and 2023.”
Overall, the total startup funding into Africa dropped by 39% to $2.9 billion in 2023, reflecting a challenging landscape for investment in the region.
