The persistent "funding winter" impacting African tech startups, and their global counterparts show no signs of letting up, with first-quarter (Q1) funding plummeting over 50 percent to US$310 million from US$650 million in the same quarter the previous year.

The ninth edition of the African Tech Startups Funding Report, unveiled in January by Disrupt Africa in collaboration with Flourish Ventures, AAIC Investment, and Atlantica Ventures, revealed that throughout 2023, a total of 406 startups amassed US$2.4 billion.

This represented a significant recalibration for African tech, triggered by a worldwide capital crunch. The figures indicated a 35.9 percent decrease from the 633 startups funded in 2022, while the total funding of US$2.4 billion represented a 27.8 percent fall from the US$3.33 billion collected in 2022.

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Expectations for a recovery in 2024 were quashed by a disheartening first quarter, with only US$310 million raised in the initial three months, a 52.3 percent drop from the US$650 million garnered in the equivalent span of 2023. The decline rate was notably consistent, as Q1 2023 funding had already dropped 57.2 percent from Q1 2022.

The count of funded startups in Q1 2024 slightly decreased to 82 from 87 in Q1 2023. Considering that 175 startups were funded in Q1 2022, the reduction pace in the number of funded ventures appears to be decelerating. However, if funding levels persist at this rate, 2024 is on track to surpass 2023 in terms of reduced funding for African tech enterprises.

Culled from Disrupt Africa