Nigerian Startups Raise $160m Amid Funding Drought In Q1

Nigerian startups raised $160 million in funding in the first three months of this year despite the slowdown in funding on the African continent, a new report by Africa: the Big Deal revealed.
According to the report, Nigeria, Kenya, South Africa, and Egypt accounted for 87 percent of all startup investments in Africa during this period.

The breakdown of funding among the Big Four shows Nigeria leading with $160 million, followed by Kenya with $108 million, South Africa with $72 million, and Egypt with $53 million.

“Eighty-seven percent of the investment was channelled to startups headquartered in these four countries, with Nigeria and Kenya attracting the lion’s share. Only a handful of other African nations managed to secure more than $5 million in funding,” the report said.
Briter Bridges in its first quarter analysis report disclosed that African startups raised a total of $370 million in disclosed funding across 120+ deals in Q1, a 61 percent decline in the volume of funding from Q1 2023.

Despite the challenges, African startups remain resilient, with many continuing to innovate and create new business models to drive growth in the sector.

“The key now is for investors to recognise the potential of the African tech ecosystem and provide the necessary support for these startups to thrive,” the report said.
Prashant Matta, SP, Panache Venture told BusinessDay that the decline in funding is a widespread issue affecting countries globally, exacerbated by ongoing economic challenges including recession, inflation crises, and economic downturns.

However, investors are optimistic about Nigerian startups as mega deals were announced in Q1.
It said, “The $100M+ deal into Nigerian mobility fintech startup Moove. Similar to other mega-deals, this funding came from outside of Africa. Two investors from the Middle East participated in the mega-rounds in both quarters, Mubadala and Chimera Investments.”
According to the Big Deal report, the logistics and transport sector attracted the highest funding in the

year’s first quarter, totaling $151 million from 14 deals.
“Transport and logistics snatched the number one spot in terms of the total amount raised. Africa Moove’s startup raised $110 million in Q1 2024, and Uber’s $100 million series B round attracted more than 24 percent of the funding on the continent in Q1.”

Fintech attracted the second most funding, with $105 million. This was followed by agriculture and food, which raised $50 million, followed by energy with $49 million, and Healthcare with $45 million.