According to a survey by the African Private Equity and Venture Capital Association (AVCA), Egypt overtook Nigeria as the continent’s largest equity funder from June 2022 to June 2023.
The data released stated that the entrepreneurs in the North African nation raised USD 540 million between June 2022 and July 2023, surpassing Nigeria, the continent’s largest economy.
The research showed that even though this was a 25% fall from the USD 710 million raised the year prior, it represented the least decline among the major four African nations that attracted the greatest funding.
Egypt was also the only country to surpass half a billion in that period.
Funding for tech companies in Nigeria fell the most, down 77% year-on-year from USD 2 billion to USD 470 million, the group that boosts private investment in Africa said in its report.
South African start-ups lost 53% of their investments, falling to USD 420 million, while deals in Kenya fell 69% to USD 300 million over the same period.
During the funding heatwave between June 2021 and June 2022, the Big Four – Nigeria, Kenya, South Africa and Egypt – collectively raised USD 4.6 billion. This dropped to USD 1.7 billion in the funding winter between June 2022 and July 2023, AVCA said in its report.
The ‘funding winter’ first hit the US and China before spreading.
The financial sector, popularly known as fintech, continued to attract most equity funding, albeit at a slower pace, AVCA said.
Over the years, the success of companies like Nigeria’s Paystack, which was acquired by US payments firm Stripe in 2020, and another unicorn startup Flutterwave has propelled business execution in Africa.
Other notable successes include payments platform MFS Africa, Kenyan fintech and solar company M-Kopa, and e-commerce company Wasoko.
However, this year was not all doom and gloom, the report states.
“Against all odds, three markets managed to pull off growth in this unfavourable context,” the report co-authored by Maxime Bayen, the Operating Partner for Catalyst Fund, and Max Cuvellier, Head of Mobile for Development, GSMA who co-authored the report said, Zawya reported.