Kenya leads Africa's startup funding

In a remarkable display of resilience amid a global "funding winter," Kenya has emerged as Africa's leading destination for startup funding in 2024, securing $638 million and accounting for 29% of the continent's total venture capital investments. This achievement comes despite an overall decline in African startup funding, which dropped 25% from $2.9 billion in 2023 to $2.2 billion in 2024.

Kenya's dominance is particularly pronounced in East Africa, where it captured an impressive 88% of regional funding. The country's success was driven by significant investments in climate technology, with notable deals including BasiGo's Ksh.5.8 billion raise for electric vehicles and SunCulture's Ksh.3.6 billion for solar-powered irrigation solutions.

The continent's "Big Four" startup ecosystems - Kenya, Nigeria, Egypt, and South Africa - continued to dominate, collectively attracting 84% of total funding. Nigeria secured $410 million, followed closely by Egypt with $400 million and South Africa with $394 million. East Africa maintained its position as the continent's leading region for the second consecutive year, attracting $725 million in total investment.

However, the broader context reveals a challenging environment for African startups. The ongoing "funding winter," triggered by rising inflation, weakening currencies, and unfavorable interest rates, has led to a significant retreat of foreign investment from emerging markets. This trend is evident in the declining number of startups raising substantial funding - only 188 ventures secured $1 million or more in 2024, compared to 353 in 2022.

Despite these headwinds, the ecosystem showed signs of maturity with 22 public exits in 2024, slightly up from 20 in 2023. The year also welcomed two new unicorns: Nigeria's Moniepoint and South Africa's Tyme, demonstrating that exceptional growth stories continue to emerge even in challenging conditions.

As Africa's startup ecosystem navigates this period of reset, Kenya's leadership position suggests a potential shift in investor focus toward sustainable technologies and proven business models, particularly in sectors addressing critical infrastructure and environmental challenges.