African startups’ fundraising trends have reverted to what we might call pre-COVID norms. In a nutshell: Startups on the continent raised less money in the third quarter of 2023 than they have since the end of 2020, according to The Big Deal.
The continent’s startups are not alone in their fundraising struggles. Canadian startups have been fighting to raise money, as have companies in India and the rest of the world.
But there’s an interesting trend here: While it’s true that venture capitalists are holding on to their checkbooks around the world, it appears not every region is fighting equally hard. Mature venture markets like the United States and Europe are seeing less total venture investment, yes, but they are still far from reaching the kind of decline in funding that would make us worry if there’s enough capital in the market to fund a material sector.
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This morning, we’re exploring Q3 2023 venture capital data from Africa, considering both investments and exits, and we’ll close with a look at the bright spots in the collected figures. The resulting picture is far from encouraging, but there are always green shoots to highlight.
Funding dries up in the heat
African startups raised $590 million across 175 deals in the third quarter, per Briter Bridges. According to The Big Deal, that figure was lower, around $500 million, but the firm noted that this number also includes debt and grants in addition to equity fundraising.