In the first half of 2024, mergers and acquisitions fuelled African startups to surpass the $1 billion investment threshold, indicating a steady upturn and ongoing investor confidence in spite of limited worldwide funding.
In the first half of 2024, African startups raised over US$1.1 billion in funding, indicating a rise in investment activity on the continent. Although this is more than the US$1 billion raised in the first half of 2023, it is still less than the US$1.5 billion and US$1.8 billion raised in the second and first halves of 2022, respectively.
This investment boom highlights the robust and potential African startup ecosystem at a crucial moment when venture capital globally is facing a severe shortage.
The first half of 2024 also saw a spike in African investment, with over US$1.67 billion committed through new funds, according to data from the African startup tracker Wee Tracker. This demonstrates how, despite a worldwide funding crunch, the venture capital sector on the region has been gradually improving.
With the US$470 million it raised through its Adenia Africa Fund, Adenia Partners spearheaded the fundraising boom. This fund seeks to promote innovative enterprises in the fintech, telecom, and healthcare sectors across Africa. It is supported by investors including Norfund AS, the US International Development Finance Corp., and Canada’s Findev Inc.
Other noteworthy fund debuts in H1 2023 included the US$3 million Glint Fund II by Glint, which was focused on supporting the entrepreneurial landscape in Central and Eastern Africa, and the US$98.7 million African Rivers Fund IV by XSML Capital.
The over $300 million final closing of Partech’s oversubscribed Africa II fund is another indication of Partech’s faith in the continent’s markets.
Offering initial tickets for Seed to Series C rounds ranging from US$1 million to US$15 million, the fund intends to invest across the continent, assisting businesses as they expand both domestically and globally.
Significant consolidation was also achieved in the first half of 2024 through large purchases. The well-known finance business Lesaka purchased its rival Adumo for US$85.9 million.
Wee Tracker pointed out that Lesaka’s ambitious expansion plan in the fintech industry is demonstrated by the fact that this occurs barely three years after Adumo acquired fintech company SwitchPay in 2021.
Acquiring Utilis Ventures, a prominent investment advising firm in Uganda, enhanced Level Africa’s standing.
Rebranding Utilis Ventures to Level Africa Uganda Limited was part of this calculated strategic decision, which improved the company’s capacity to provide investors in Africa with greater local knowledge and insights.
BuuPass, a Kenyan travel booking platform, increased its market share by purchasing QuickBus, a rival in South Africa and Nigeria. Through API interfaces, QuickBus’ relationships with banks and telcos will be used in this transaction to provide a wider choice of trip booking possibilities.
Wee Tracker states that “BuuPass branding replaced QuickBus within existing integrations as part of the acquisition, ensuring a smooth transition for Nigerian and South African users.”
“African startups have raised $1,129,592,550+ in funding so far,” according to Wee Tracker. These investments and acquisitions show that the African startup scene is strong and developing, establishing the continent as a major participant on the global stage.
A growing number of investors are realising Africa’s potential and special prospects, which will encourage greater innovation and long-term growth in the years to come.
