Kenya becomes Africa’s leading destination for startup investment

Kenya has emerged as the preeminent investment destination for startups in Africa, surpassing formidable competitors such as Nigeria,  South Africa, and Egypt, as outlined in a comprehensive report from ‘The Big Deal’, a prominent startup database.

The report reveals that in 2023, Kenyan startups successfully secured a substantial investment of nearly Ksh126 billion ($800 million), constituting a noteworthy 28% share of the overall funding injected into the African entrepreneurial landscape.

According to the report, Kenya has solidified its position among the top four players in the African startup ecosystem, showcasing remarkable resilience and competitiveness against larger economies such as Nigeria and South Africa.

“With just under $800m raised in 2023, Kenya attracted the most funding, 28% of the continent’s total,” the report stated.

The report highlighted Kenya’s leadership in the East African region, specifically in securing investments surpassing $100,000, positioning the country at the forefront of entrepreneurial funding within the specified timeframe.

Thank you @rebecca_miano 🇰🇪 for sharing our insights and data on startups funding in Africa 🙏

More insights: https://t.co/7uswBosmMN
More data: https://t.co/E1RHnhqR7y https://t.co/R8W58PigLm

— Africa: The Big Deal (@AfricaTBD) January 9, 2024

The report also noted that Kenya’s share of Eastern Africa’s funding soared from 86% in 2022 to 91% in 2023.

“While it suffered a decline (-25% YoY), its share of Eastern Africa’s funding grew from 86% in 2022 to 91% in 2023.” It added.

Also Read: Nigeria to Increase Startups Fundraising to $5b by 2027 

In 2023, Nigeria, traditionally a leader in African startup funding, experienced a reversal. Despite the highest number of startups raising $100,000 or more (146, 29% of the continent), total funding plummeted by 67% to $410 million. This led to Nigeria’s share of Western African funding dropping to 68%, the lowest among the ‘Big Four’ since data collection began in 2019.

Meanwhile, Egypt, with the lowest number of startups (48) among the ‘Big Four’ raising $100,000 or more, claimed the second spot due to a modest year-on-year decline (-20%). Despite regional challenges, Egypt’s share of North African funding surged from 72% in 2022 to 95% in 2023, attributed to MNT-Halan’s significant fundraising and challenges faced by Algeria and Tunisia.

South Africa, on the other hand, sustained its dominance in regional funding, securing a 97% share and amassing $600 million. The unique aspect among the ‘Big Four’ was a notable 8% year-on-year increase, signaling a robust and expanding startup ecosystem. The 70 South African startups raising $100,000 or more contributed 21% to the continent’s total funding.

The comprehensive report from ‘The Big Deal’, underscores Kenya’s increasing influence in the African startup ecosystem, shedding light on the nation’s adeptness in attracting significant investments.

It accentuates the country’s strategic positioning as a pivotal player in nurturing entrepreneurial innovation, showcasing not only its current prominence but also its potential to shape and drive future trends within the dynamic landscape of African startups.