Conrad Onyango, bird story agency

In 2023, Africa's startup ecosystem finally succumbed to a funding crisis that had been looming for over a year. A big fall in funding aligned the continent's trajectory with that of the global market and left startups reeling.

A slew of investment reports show a significant drop in fundraising, across all tech sectors and in all forms of funding, from equity to debt.

A Partech report shows that during the year, African tech startups raised a total of US$3.5 billion in funding, a drop of almost 50% over 2022.

Reports show that the "big four" startup ecosystems in Africa still hold a commanding lead, with some movement among them for the top spots. They have the advantage of not only being the top destinations for investment capital for startups but are also the largest economies and consumer markets in Africa. 

bird has merged the findings of key reports on the sector to bring you Africa's top ten startup hubs based on funds raised in a difficult year.

1. Kenya

The Big Deal Report places Kenya in the top spot with US$800 million in fundraising in 2023, attracting 28% of the continent’s total. 

2. Egypt

The Big Deal Report shows that while Egypt's fundraising prospects were dented by the overall fall in incoming funds, it was still the second most attractive region on the continent, with US$670 million raised.

3. South Africa

Reports agree that South Africa was the most resilient of the big four regions. The 'Deal report shows that the Southern African country raised US$600 million to take the third spot, 

4. Nigeria

Nigeria experienced a considerable decrease in fundraising. The Big Deal Report showed that the country dropped from first position to fourth, with a total of US$410 million. 

5. Benin and Morocco

Benin and Morocco, both French-speaking nations, share the fifth position in terms of the size of their startup ecosystems according to The Big Deal, whose report places Benin in the fifth position, with Morocco also in fifth, with US$93 million. 

6. Democratic Republic of Congo (DRC)

Increased fundraising in the energy and fintech sectors in the DRC made the ecosystem a key contributor to some 33%  growth in startup funding in the formerly lacklustre Central Africa region. Funding rose from US$51 million in 2022 to US$68 million in 2023- the largest growth rate of all regions, according to the Big Deal report. 

7. Ghana

Reports show that Ghana’s position has dropped compared to 2022 when it was in fifth spot. Statista shows the startup market had aggregate funding of some US$102 million in 2022. According to the Big Deal report, the country has since slipped two positions to seventh.

8. Rwanda

Two reports rank Rwanda in eighth position. The Big Deal report gives the market a funding volume of US$44 million while Partech puts it at US$38 million. The market’s position is likely to change in 2024 following the launch of Timbuktoo, a 10-year US$1 billion Africa Innovation Fund- the largest ever startup fund in Africa which will be domiciled in Rwanda. The initiative targets 1,000 tech startups across seven other African countries.

9. Senegal and Tunisia

Both Partech and The Big Deal report Senegal and Tunisia with funding income that puts them on a par in ninth spot on bird's TenX index.

10. Tanzania

The Big Deal places Tanzania in the tenth place with US$25 million. 

Useful link: https://www.statista.com/statistics/1396695/ghana-startup-market-size-by-funding-and-deal-count