Africa’s startup funding scene is shifting in a big way, with local investors stepping up more than ever. In 2024, they made up 31% of all active investors in the continent—up from just 19% a decade ago, according to the African Private Capital Association (AVCA). Even though the total number of investors dropped by 21%, this increase in domestic participation signals a maturing ecosystem. Local players are now seen as essential, offering not just capital but also deep market insight and a stronger connection to the continent’s unique challenges and opportunities.
This local momentum is happening against a backdrop of tougher times globally. African startups faced a 22% drop in deal value and a 28% fall in volume in 2024. The total raised was $3.6 billion from 487 deals—including $1 billion in venture debt. Despite accounting for less than 1% of global VC activity, there’s still strong optimism. AVCA points to quality over quantity: more strategic investments, a broader sector mix beyond fintech, and more startups tapping into non-traditional funding like venture debt.
Interestingly, African startups are now commanding bigger rounds at later stages. Series B and C rounds averaged $29 million and $38 million respectively—actually beating global averages. This could suggest not just growing confidence in African companies but also higher costs or greater capital needs due to local market conditions. Still, it’s a clear sign that African startups are learning to play on a global level, especially in competitive sectors like AI, fintech, cleantech, and climate tech.
Regionally, West Africa led in deal volume—thanks in part to Nigeria’s $417 million in funding—but South Africa topped in total value. The continent’s “big four” markets—Nigeria, Egypt, Kenya, and South Africa—dominated both volume and value. Despite the overall slowdown, African startups raised $2.2 billion in equity, grants, and exits in 2024, and $460 million in Q1 2025 alone. All of this points to an ecosystem that’s weathering tough times with resilience and evolving in smart, locally driven ways.
Source: Business day