African Startups Break Records with $420 Million Raised in July

African startups have had a remarkable year so far, surpassing $1.2 billion in total funding in 2024, with a stellar performance in July contributing significantly to this milestone. According to a recent report by Africa: The Big Deal, startups across the continent raised an impressive $420 million in July, the highest monthly fundraising performance in over a year.

Record-Breaking Month

The $420 million raised in July 2024 marks the highest monthly total since tracking began in 2019 and is more than the entire amount raised in the second quarter of this year. This sum also represents 2.5 times the average monthly amount raised over the past 12 months, signaling a strong rebound in investment activity amid a global funding slowdown.

Major Deals Driving the Surge

Three major deals dominated July's fundraising landscape, accounting for 90% of the total funds raised. These deals include:

1. d.light: A solar energy company, which secured a new $176 million securitization facility.
2. MNT-Halan: A microfinance lending and payment company, which raised $157.5 million to support its expansion.
3. NALA: A financial technology company, which closed a $40 million Series A round.

Combined, these deals have significantly boosted the overall funding figures and highlighted the continued investor interest in impactful and scalable African startups.

Broader Ecosystem Performance

In addition to the major deals, 47 ventures raised at least $100,000 in July, making it the second-best month this year after May.

Out of these, 16 ventures raised at least $1 million, which aligns with the monthly average for the first half of the year. This diverse range of funding activities indicates a healthy and dynamic startup ecosystem across the continent.

Funding Trends and Challenges

Despite the impressive numbers, the distribution of funds highlights some disparities. Kenyan startups have emerged as the top recipients of funding, attracting approximately $800 million in 2023, while Nigerian startups, once the leading destination for startup funding in Africa, secured $410 million. This trend has continued into 2024, with Kenyan startups garnering $244 million in the first half of the year, representing 32% of the total funding raised, while Nigeria received approximately $172 million.

Nigerian startups have faced challenges in securing large deals, with only a few notable exceptions such as Moove's $100 million Series B round and Intrion Health’s $1.6 million pre-seed round in July. The scarcity of big deals and a trickle of smaller investments have raised concerns about the sustainability of the Nigerian startup ecosystem's growth.

A Promising Outlook

The impressive fundraising performance in July has not only allowed the African startup ecosystem to surpass the $1 billion mark in 2024 but also to exceed the total amount raised in 2020. With $1.2 billion already raised this year, the next milestone of $1.4 billion, which was achieved in 2019, is now within reach.

African startups are showing resilience and innovation, attracting significant investments despite global economic challenges. The record-breaking fundraising in July underscores the potential of African startups to drive economic growth and development across the continent. As the ecosystem continues to evolve, the focus will be on sustaining this momentum and addressing the challenges faced by startups in various regions to ensure inclusive and equitable growth.