African tech startup investment falls 28% to $2.4bn in 2023 as global “funding winter” begins to bite

Total investment into the African tech startup ecosystem fell by 27.8 per cent to US$2.4 billion in 2023 as the impacts of the global capital shortage began to make themselves felt on the continent.

This is according to the ninth edition of the annual African Tech Startups Funding Report released by startup news and research portal Disrupt Africa, which is available free to all as part of an open-sourcing initiative in partnership with Flourish Ventures, AAIC Investment, and Atlantica Ventures.

While the African tech space had an impressive 2022, bucking global trends to see total funding increase to beyond the US$3 billion mark for the first time on record, 2023 signified a reset of sorts. A total of 406 startups raised a combined total of US$2.4 billion over the course of the year. 

Though still the third best year on record in terms of funded ventures, and the second best for total capital secured, this represented a significant decline on 2022. The number of funded ventures was down 35.9 per cent on the 633 that raised in 2022, while the combined total of US$2.4 billion was down 27.8 per cent. In addition, the number of active investors fell by almost 50 per cent, and M&A activity also witnessed a significant decline.

This is the first time the sector, which has expanded so exponentially in the last few years, has declined since 2016, though a fall in funding of less than a third is an improvement on projections from earlier in 2023, when a decline of 50 per cent was deemed likely. Africa, like the rest of the world, has been affected by the global “funding winter”, with venture capital drying up and several leading startups forced to cease operations or significantly restructure their operations.

Nigeria, Egypt, South Africa and Kenya remain Africa’s “big four” from a funding perspective, securing a larger share of total funding between them than in 2022. Nigeria, however, saw funding decline tremendously, by 59 per cent to just shy of US$400 million. That pushed it into fourth position overall, behind Kenya, Egypt and South Africa, though it still had more funded startups that any other market. Startups secured capital in 22 other countries.

The fintech sector was, yet again, the most attractive to investors in 2022, with more startups securing funding than any other sector and a combined total that dwarfed all others. Yet, as with most other sectors, it saw a steep decline in investment, down 33.4 per cent to US$964 million.

The report is available for free download here. Aside from providing a full list of the funded startups, who invested in them, and, where possible, the amount raised, from the previous year, the annual reports also provide deep-dives into investment trends within key startup geographies and verticals, as well as data on African startup acquisitions.

“On the face of it, 2023 was a very bad year indeed for African tech from a funding perspective, with the difficulties in obtaining funding quantified by this report borne out by events on the ground, with companies of all stages battling – and some failing – to stay afloat in this “funding winter”. Yet, it must be remembered that this is not a phenomenon unique to Africa, but rather the result of global headwinds, and the numbers are certainly not as bad as it was looking like they would be back at the end of Q1 or Q2,” said Disrupt Africa co-founder Gabriella Mulligan.

Disrupt Africa co-founder Tom Jackson said “winter” would soon “turn to spring”, with investment inevitably rising again in the coming 12-to-18 months, though perhaps not immediately to the levels of 2022. 

“African tech is still at an early stage of its journey, with plenty of room to grow, and one relatively bad year from a funding perspective does not change that. The key thing for now is for startups to adjust to this “new normal”, by plotting a path to more sustainable growth while also ensuring good governance is enshrined within their organisational structures. Funds are being raised, and capital is being disbursed, and for the best ventures – and the ecosystem as a whole – 2023 should prove to be little more than a blip on the growth curve,” he said.

Previously available for sale, the African Tech Startups Funding Report was previously purchased each year by leading tech companies from Africa and the rest of the world, Big Four consulting firms, banking and fintech leaders, venture capital firms, supranational investors and international trade bodies. Now, however, Disrupt Africa releases the publication for free, making it accessible to those for whom the information is most valuable – African entrepreneurs. 

This year it is doing this with the help of partners Flourish Ventures, AAIC Investment, and Atlantica Ventures, with whose support Disrupt Africa will be distributing the African Tech Startups Funding Report 2023 to as many ecosystem stakeholders as possible.

“As long-term backers of African founders, we are optimistic about the future of the tech ecosystem on the continent and are particularly encouraged by its performance in a globally difficult year. We are delighted to partner with Disrupt Africa to present the 2023 edition of the African Tech Startups Funding Report to all stakeholders,” said Ameya Upadhyay, venture partner at Flourish Ventures.

“For the sustained growth of the African startup ecosystem, continuous dissemination of information is indispensable. We are pleased to contribute to the efforts of Disrupt Africa, aiming to foster long-term development,” said Hiroki Ishida, principal (Africa) at AAIC Investment.

“We are delighted to partner with Disrupt Africa on their 2023 startup funding report, which is an essential source of industry insights and funding trends for both emerging technology startups and investors in the region,” said Aniko Szigetvari, founding partner at Atlantica Ventures.

For more information, or to download the report, please visit, or email Gabriella on [email protected], or Tom on [email protected].

About Disrupt Africa

Disrupt Africa is the one-stop-shop for all news, information and commentary pertaining to the continent’s tech startup – and investment – ecosystem. With journalists roaming the continent to find, meet, and interview the most innovative and disruptive tech startups, Disrupt Africa is a true showcase of Africa’s most promising businesses and business ideas. Its research arm releases in-depth reports on various aspects of the African tech startup ecosystem. Details here.

About Flourish Ventures

Flourish is an evergreen fund investing in entrepreneurs whose innovations help people achieve financial health and prosperity. With $850M in patient capital under management, Flourish invests in fintech startups that advance financial health and prosperity for individuals and small businesses. Present on five continents, Flourish’s global portfolio of more than 70 companies includes Alloy, Chime, Fair Money, Flutterwave, among other high-growth companies. Flourish works alongside industry thought leaders, policy workers and regulators to better understand the needs of the underserved and create systemic change to help foster a fair, more inclusive economy. Established in 2019, Flourish is a part of the Omidyar Group and is headquartered in Silicon Valley, California, with offices in Washington DC, Bangalore, Nairobi and London

About AAIC Investment

AAIC Investment aims to invest in rapidly expanding companies within the healthcare and technology sectors in Africa. Our primary focus is to provide growth capital and long-term value, supporting companies in enhancing their performance and facilitating expansion. We established our second fund in 2022, and the total commitment reached $87 million, encompassing over 45 investments. AAIC maintains offices in Singapore, Kenya, Nigeria and South Africa.

About Atlantica Ventures

Atlantica Ventures is a pan-African venture capital firm specializing in early-stage investments across the African continent. Our focus is on supporting founders who leverage innovation to drive substantial change, fostering long-term value and societal impact. Comprising professionals with diverse technical, investment, and operational expertise, we invest in ventures ranging from Pre-Seed to Series B rounds. With offices in Lagos and Nairobi, we extend our reach through strategic partnerships in New York and the San Francisco Bay Area.

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