Startups in Kenya secure Sh14Bn in Q1 funding
Kenya’s startups ecosystem attracted $108 million (about Kes14 billion) in disclosed financing deals in the first quarter 2024, positioning East Africa’s largest economy as a strong contender in the continent’s entrepreneurial arena, second only to Nigeria.
According to data from Africa: The Big Deal, Nigeria led Q1 funding race with $160 million (Kes20.8 billion), constituting 35 percent of the total $466 million (Kes60.6 billion) realized across Africa in equity, debt, and grants by the upcoming businesses.
The quarter marked a significant moment for African startups, carving out both geographical and sectoral distribution of investments amid broader economic contexts influencing the startups ecosystem.
South Africa and Egypt followed in the financing tally, securing $72 million (Kes9.4 billion) and $53 million (Kes6.9 billion), respectively, underscoring the diverse nature of the startups ecosystem in Africa.
Meanwhile, startups in neighbouring Uganda, Tanzania as well as Ghana and Morocco also made notable strides each attracting well over $5 million in financing, a pointer to growing potential within these economies.
The composition of the funding, however, reveals reliance on equity, which formed 71 percent of the disclosed amounts, while debt financing accounted for the balance, 28 percent. The report authors noted that equity investments continue to show resilience quarter-over-quarter despite a notable dip in debt financing from Q4 2023 to Q1 2024.
Sector-wise, the transport and logistics industry was the leading recipient of funding, buoyed by huge deals such as Moove transactions, which accounted for nearly three quarters of the sector’s total funding.
Read also: The rise of African startups in the face of adversity
Fintech funding
Across Africa, fintech maintained its prominence in the number of the over $100,000 deals, followed closely by agri and food sector. Startups in these sectors have continued to play increasing role in deploying sustainable and environmentally conscious initiatives.
However, despite the potential of the startup ecosystem, financing disparities remain, especially for women-led enterprises. The first quarter continued to favour male-led ventures, with less than 1 percent of funding allocated to startups without at least one male founder. Only 6.5 percent of the total financing was channeled to female startup CEOs.
The quarter also witnessed seven exits in the funding ecosystem, including key transactions in South Africa, such as HRtech PaySpace’s acquisition by Deel and fintech nCiro’s acquisition of DocFox. These exits not only represent growth for the entities involved but also signal the maturing of the African startup ecosystem, offering case studies for emerging entrepreneurs and investors.
