Grace Ashiru
A single funding round by Nigerian fintech Waza contributed to the country’s 14% share of the total $56 million raised by African startups in August.
This information comes from the latest report by the research firm ‘Africa: The Big Deal,’ which tracks fundraising activities across the continent.
In August, Waza, a Y Combinator-backed B2B payment and liquidity provider for emerging market businesses, secured $8 million in funding, comprising a $3 million seed equity round and $5 million in debt financing.
This deal became one of the three largest transactions completed by African startups that month, according to the funding report. The other two significant deals include Dutch DFI FMO’s $10 million investment in Ghanaian fintech Fido as part of its Series B round and Solarise Africa’s $9 million announcement.
The month is the second slowest recorded in the past four years.
Following a record $443 million in July, the $56 million raised by African startups in August indicates an 87% month-on-month decline in funding.
- Africa: The Big Deal noted that this resulted in August 2024 being the second-slowest month for funding raised in four years, following June 2024, when $42 million was secured.
- The report also reveals that the majority of funding raised in August was in the form of equity, accounting for 87%, while 9% came from debt and 4% from grants.
- According to the report, a total of 27 start-ups announced they had funding in August, which was well below the monthly average over the past twelve months of over 40. No exits were recorded last monthThe report states that a total of 27 startups announced funding in August, significantly lower than the monthly average of over 40 for the past twelve months, with no exits reported last month.
July Record
With the ongoing global startup funding drought, African startups may find it challenging to exceed the July record of $443 million in the remaining months of the year.
The report from Africa: The Big Deal highlighted that the funds raised in July 2024 were not only the highest of the year but also the highest in the past 14 months. It exceeded the total amount raised in Q2 2024 and was 2.5 times greater than the average monthly funding over the last 12 months.
The record set in July also propelled African startups past the $1 billion mark, signaling a notable improvement during the ongoing funding winter.
However, this year has been challenging for Nigerian startups regarding fundraising. In August, the country reported only one funding event, while in July, the $1.6 million pre-seed round by Intron Health was the sole significant funding news for a Nigerian startup.
What you need to know
- Nigeria, once the leading destination for startup funding in Africa, lost its top position to Kenya in 2023, with Kenyan startups attracting approximately $800 million—the largest amount on the continent—while Nigerian startups secured $410 million.
- In the first half of 2024, African startups secured $780 million in funding, with Kenyan startups receiving the largest share at $244 million, accounting for 32% of the total. Nigeria received approximately $172 million, Egypt secured $101 million, and South Africa garnered $85 million.
- Data from Africa: The Big Deal shows that from 2019 to 2023, Nigerian startups received the largest portion of funds raised by African startups, accounting for 29% of the total $15 billion in investments.
