How African startups raised venture capital funding in February 2023 

·
March 15, 2023
·
3 min read
funding

For anyone who has been paying attention, funding to African startups appears to have slowed down in the past month. With two weeks gone in March, only a handful of disclosed or undisclosed fundraises have been announced across the continent.

Coming after a year when venture capital funding activities slowed down globally, one wonders whether Africa is finally beginning to see the impact. Regardless, February 2023 was a good month of fundraising for startups in Africa and using data from Intelligence by Techpoint, we explore some of the themes for funding in Africa.   

More startups raised capital in February than in January 2023 

In January 2023, 23 African startups raised a little over $70 million across 24 funding rounds. In February, there was a significant improvement, as 44 startups raised more than $675 million in 48 funding rounds. In terms of distribution, South Africa and Kenya had ten startups represented, Nigeria had 9 startups, and Egypt had six startups represented.

The Big Four are going nowhere 

When a funding announcement is made, chances are that it is going to one of Nigeria, Kenya, Egypt, or South Africa. These four countries, commonly called the Big Four, account for much of Africa's startup funding.

Advertisement

Egypt was by far the country that got the most funding — $437 million — due to MNT-Halan's $400 million raise. South Africa followed in second place with $173.7 million, while Nigeria ($36 million) and Kenya ($15.8 million) rounded up the top four.

Rwanda, Morocco, Zambia, Botswana, and Tanzania made an appearance, having cumulatively raised $12.8 million for nine startups. Of these five countries, only Morocco made a repeat appearance after startups based in the country raised $1.9 million in January 2023. Perhaps, it could soon become a regional powerhouse, rivalling Egypt as the premier destination for venture capital in the North African region.

Financial services remain attractive 

No other sector has raised more capital than fintech in the past five years, and February 2023 was no exception. Startups in the financial services industry raised $572.9 million and made up 84% of funding received throughout the month.

When put in context, MNT-Halan was responsible for $400 million of the amount. But even without MNT-Halan's raise, startups in the financial services space raised $172.9 million, well ahead of the healthcare space in second place with $40.4 million.

First unicorn in 14 months 

The last time an African startup attained unicorn status was in November 2021, after Chipper Cash raised $150 million in a Series C extension round that valued it at more than $2 billion.

Be the smartest in the room

Join 30,000 subscribers who receive Techpoint Digest, a fun week-daily 5-minute roundup of happenings in African and global tech, directly in your inbox, hours before everyone else.
Digest Subscription

Give it a try, you can unsubscribe anytime. Privacy Policy.

A new unicorn was added in February 2023, with MNT-Halan raising $400 million. In the process, it became Africa's first unicorn of 2023 and Egypt's first unicorn. But following the trend, Africa's first unicorn in 2023 was in the financial services space.

Something we're seeing is African startups increasingly opting for debt financing. In February 2023, debt was responsible for $238 million of the funding raised, with MNT-Halan, Yellow, MyCredit, Planet42, Hollydesk, and Jali Finance raising debt financing. Interestingly, all six startups are in the financial services space. Series B funding also made up a huge part of the funding in February at $104 million.


Got a tip? Our journalists are ready to dig deeper. Please share your insights and information and help us uncover the stories that matter.

Accidental writer, covering Africa's startup landscape and its heroes. Find me on Twitter @chigo_nwokoma.
Accidental writer, covering Africa's startup landscape and its heroes. Find me on Twitter @chigo_nwokoma.
Subscribe To Techpoint Digest
Join thousands of subscribers to receive our fun week-daily 5-minute roundup of happenings in African and global tech, directly in your inbox, hours before everyone else.
This is A daily 5-minute roundup of happenings in African and global tech, sent directly to your email inbox, between 5 a.m. and 7 a.m (WAT) every week day! 
Digest Subscription

Give it a try, you can unsubscribe anytime. Privacy Policy.

Accidental writer, covering Africa's startup landscape and its heroes. Find me on Twitter @chigo_nwokoma.

Other Stories

43b, Emina Cres, Allen, Ikeja.

 Techpremier Media Limited. All rights reserved
magnifier