Kenya takes funding crown as African tech investment dips
Kenya emerged as the surprise leader in African startup funding despite a global slowdown in tech investment, according to Disrupt Africa’s latest report. While total investment dropped by nearly 28 percent in 2023 compared to 2022, Kenya attracted a record-breaking 674 million U.S. dollars, surpassing the previous frontrunner, Nigeria.
The report, titled “The African Tech Startups Funding Report 2023,” highlights a period of recalibration for the continent’s tech ecosystem. After a banner year in 2022, which saw total funding surpass 3 billion U.S. dollars for the first time, investors adopted a more cautious approach in 2023. However, the year still marked the third-highest on record in terms of funded ventures and the second-highest for total capital secured.
Kenya’s rise to the top is attributed in part to significant funding rounds secured by two of its energy companies. This shift suggests a growing focus on sectors beyond the traditionally dominant fintech space. While the “big four” – Nigeria, Egypt, South Africa, and Kenya – continued to attract the lion’s share of funding (90.4 percent), their dominance appears to be waning slightly compared to 2022 (80.8 percent).
Disrupt Africa’s report offers positive signs for gender diversity within the African tech landscape. Despite the funding decline, there are indications of improvement in female-led startups receiving investment. This trend aligns with initiatives like the AWIEF (African Women in Entrepreneurship and Innovation) program, which recently launched a Nigerian accelerator program focused on supporting female founders.
Overall, Disrupt Africa’s report paints a picture of a maturing African tech market. While investment may have cooled slightly, the fundamentals remain strong. The continent continues to produce innovative startups addressing local challenges, and investors are taking notice albeit with a more discerning eye. Kenya’s success story and the growing focus on underrepresented sectors like clean energy offer exciting prospects for the future of African tech.
