African startups secured $187 million in funding in May
African startups announced a significant increase in funding in May, with a total of $187 million raised, Africa: The Big Deal, a company that monitors deals announced by startups on the continent, announced Monday.
This figure represents a 149 percent increase from the $75 million raised in April, indicating a promising trend for the continent’s startup ecosystem.
The report on its website reveals that 64 companies secured funding of at least $100,000, and 17 startups raised more than $1 million.
This is a notable improvement from previous months, demonstrating investors’ growing confidence in African startups.
The funding breakdown included 4 percent grants, 31 percent equity and 65 percent debt.
Notable deals include Kenyan fintech company M-KOPA’s $51 million raise and electric vehicle maker Spiro’s $50 million financing.
Although the cumulative funding of $729 million still lags behind previous periods, the May numbers demonstrate a positive trajectory.
The report highlighted the resilience and potential of African startups, attracting more investment and attention from global investors.
Part of the report highlights: “However, in terms of the number of companies raising at least $1 million, 2024 compares quite well to some previous years so far: 90 compared to 95 from January to May 2023 and 91 from January to May 2021. The year 2022 was exceptional, however, with 200 companies involved in transactions worth more than $1 million between January and May.
Nigeria’s startup ecosystem had a relatively quiet May, with only two major deals totaling less than $7 million announced.
This is a significant drop from the first quarter of the year, where Nigerian startup Moove led African startup fundraising with a massive $110 million raise.
In May, digital identity solutions company Seamfix secured $4.5 million in equity funding from Alitheia IDF, an investment fund focused on gender equality.
Meanwhile, logistics startup Renda raised $1.9 million in a pre-seed round, including a mix of equity and debt.
The lack of major deals in Nigeria departs from the continent’s general trend, which saw African startups raise $187 million in May, an increase of 149 percent from the previous month.
Total funding raised by African startups in the first quarter of the year stood at $466 million, with Moove alone accounting for 24% of the total.
The start of 2024 got off to a sluggish start for African startups but rebounded in February 2024, with Nigeria leading the way in fundraising.
Total startup funding in February reached nearly $217 million, a nearly three-fold increase from the previous month’s $77 million.
Funding levels remain below figures seen during the same period over the past four years.
In February, 38 startups raised at least $100,000 last month in equity, debt or grants, the same number as in January.
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