Modest First Half for African Startups Struggling to Secure Funding This Year
The young tech gems of the continent are facing a harsh reality that began in 2023. The figures are seriously worrying the young promoters, who must take into account a difficult context and adjust their initial development plans.
The total funding obtained by these startups has plummeted by 52.4% sequentially, standing at only $274 million, a stark contrast to the $576.3 million raised in the second half of 2023. This decline continues a dangerous trend, with funding down a staggering 68% compared to the $870.8 million collected in the first half of 2023.
The funding freeze has hit startups in the early stages the hardest. Seed funding has experienced a modest decline of 15%, to $56.1 million, while early-stage rounds have seen a free fall of 70.9%, with only $218 million, compared to $750 million in the first half of 2023.
And it gets worse. Late-stage funding has completely dried up over the past six months, a radical change compared to the $67 and $55 million collected, respectively, in the second and first half of 2023.
Investors have decided to tighten their belts. The focus is on profitability rather than growth, everywhere in the world. Our startuppers must therefore rationalize their business plans and build a solid economic model to be convincing. The era of easy money is over.