African startups secured $187m funding in May – Report

African startups announced a significant surge in funding in May, with a total of $187m raised, ‘Africa: The Big Deal’, a firm that monitors deals announced by startups on the continent, said.

This represents a 149 per cent increase from the $75m raised in April.

The report, which was posted on its website revealed that 64 ventures secured at least $100,000 in funding, with 17 startups raising over $1m.

This marks a notable improvement from previous months, showcasing the growing confidence of investors in African startups.

The funding breakdown included four per cent in grants, 31 per cent in equity, and 65 per cent in debt.

Notable deals included Kenyan financial technology company M-KOPA’s $51m raise and electric vehicle manufacturer Spiro’s $50m funding.

While the year-to-date funding of $729m still lags behind previous periods, the May figures demonstrate a positive trajectory.

The report highlighted the resilience and potential of African startups, attracting increased investment and attention from global investors.

Part of the report highlighted, “However, in terms of the number of ventures raising at least $1m, 2024 so far compares rather well to some previous years: 90 vs. 95 in January to May 2023 and 91 in January to May 2021. 2022 was exceptional, though, with 200 ventures involved in $1m+ deals in January–May.”

The Nigerian startup ecosystem experienced a relatively quiet month in May, with only two major deals totalling less than $7m announced.

That was a significant decline from the first quarter of the year when Nigerian startup Moove led African startup fundraising with a massive $110m raise.

In May, digital identity solutions company Seamfix secured $4.5m in equity funding from Alitheia IDF, a gender lens investing fund.

Meanwhile, logistics startup, Renda, raised $1.9m in a pre-seed round, comprising a combination of equity and debt.

The lack of major deals in Nigeria was a departure from the continent’s overall trend, which saw African startups raise $187m in May, a 149 per cent increase from the previous month.

The total funding raised by African startups in the first quarter of the year stood at $466m, with Moove alone accounting for 24 per cent of the total.

According to the report, the beginning of 2024 experienced a sluggish start for African startups but rebounded in February 2024, with Nigeria topping the fundraisers.

The total startup funding in February reached nearly $217m, marking almost a threefold increase compared to the previous month’s $77m.

The funding levels still fell short of the figures observed in the same period over the past four years.

In February, 38 startups raised at least $100k last month in equity, debt, or grants, the same number as in January.