Kenya leads Africa ‘Big Four’ with most start-up funding in 2023: report

Kenyan start-ups accounted for the majority of investment poured into African ventures in 2023, a new report shows.

Kenya’s start-up ecosystem is classified among the continent’s ‘Big Four’ alongside Nigeria, Egypt and South Africa and according to a report released Monday by the funding tracker Africa: The Big Deal, the ‘Big Four’ attracted 87 per cent of all the start-up funding in Africa last year.

Kenya attracted the most funding with just under $800m (Ksh.126 billion), which is 28 per cent of the continent’s total.

This was however a 25 per cent year-on-year decline.

The report shows that Kenya’s share of Eastern Africa’s funding grew from 86 per cent in 2022 to 91 per cent in 2023, with 93 Kenyan start-ups raising over $100,000 (Ksh.15.8 million).

Meanwhile, Egyptian start-ups secured $640 million with 48 ventures raising $100,000 and above in 2023, the lowest number out of the Big Four.

“Thanks to a YoY decline (-20%) more moderate than Kenya and most importantly Nigeria, it was enough for the country to claim the second spot,” the report says.

South Africa on the other hand received $600 million with 70 start-ups who raised $100k or more. This was 21 per cent of the continent’s total.

“South Africa was the only one of the Big Four not to see its total funding shrink between 2022 and 2023 (+8% YoY),” says Africa: The Big Deal.

While Nigeria claimed the highest number of start-ups to raise $100k or more (146) the amount they raised was divided by 3 YoY (-67%) to reach $410 million.

The ‘Big Four’s funding last year was their largest share since 2019, the report said.

Last year generally saw a difficult operating environment in the African tech ecosystem amid rising inflation, weakening currency, and unfavourable interest rates which saw foreign investors shift capital from emerging and frontier economies.