This report offers a collection of exclusive insights spotlighting the development of and global comparison for venture capital in Africa; exploring the regions and sectors leading venture capital deals across the continent in 2023.
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2023 Venture Capital Activity in Africa
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Market Size: Africa attracted a combined US$4.5bn in venture capital and venture debt investment in 2023, across 603 deals.
Regional Focus: West Africa maintained the top spot for the third consecutive year, with Nigeria as the most active country both in the region and on the continent by deal volume.
- Southern Africa was the only region to register positive year-on-year growth in 2023 at 20%.
Super-Sized Deals: 10 super-sized deals took place in 2023 accounting for almost half of the total deal value at US$1.9bn.
- Sector Focus: The Financials sector maintained its position as the best-funded vertical with 23% of deal volume and 48% of deal value.
The Information Technology sector was the second-most active sector in terms of volume with 107 deals concluded in 2023.
Climate-related investments gained momentum in 2023, rising to close to US$790mn
African startups employing AI-related technologies raised US$641mn across 103 deals between 2022 and 2023
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🌍 Venture capital in Africa is maturing.
The fifth edition of AVCA’s Venture Capital in Africa report by #AVCAResearch deep dives into developments shaping Africa’s #startuplandscape and chronicles the maturation of Africa’s entrepreneurial space between 2014 and 2023.
Download the full report for more insights: https://bit.ly/3TA47ot
#AfricanVC #Entrepreneurship #GlobalInvestments #AfricaRising #InnovationInAfrica #AVCAResearch
🌍 African #VentureCapital in a Global Context
In 2023, venture capital deal values across the globe shrunk by more than a third compared to levels attained in 2022, including in North America and Asia where funding declines were responsible for a significant proportion of the global funding drop in 2023.
No continent was exempt from the downturn in venture capital investment, ranging from Asia's 28% contraction in deal volume at the lowest end of the spectrum to the far more significant 64% contraction registered in Latin America. In Africa, the US$4.5 billion raised across 603 deals in 2023 corresponded to a 31% decrease by volume and a 30% decrease by value when compared to 2022.
The 2023 Venture Capital Activity in Africa report by #AVCAResearch breaks down the distribution of this venture capital on the continent:https://bit.ly/3TA47ot
By Investment Stage
🤝 Smaller Deals Continue to Drive African VC Activity in 2023
🔸 Nearly half (45%) of VC deals were US$5mn or less. Two in five deals in this group were under US$1mn, showcasing the prevalence of smaller ticket sizes.
🔸 The seed stage, with a median deal value of U$1.2 million, was responsible for over a third (37%) of venture deal flow to startups on the continent last year.
This trend suggests a cautious investment climate that favoured smaller and less capital-intensive investments, but could it also present new opportunities for early-stage investors?
Download the full report for more insights:https://bit.ly/3TA47ot
#VentureCapital #Africa #Startups
By Sector
💡 Latest report by AVCA reveals headline sectorsin Africa’s 2023 VC landscape 📲 #Fintech in Africa:
AVCA’s 2023 African #VentureCapital Activity report reveals that Financials continued to rule the roost as the most active sector for investment on the continent, accounting for:
▶️ 23% of all deals by volume
▶️ Nearly half (48%) of the total deal value
This highlights the growing importance of #financialinclusion and innovation in Africa. From fintech #startups disrupting traditional banking to neo-banks offering new financial services, African entrepreneurs are redefining the financial landscape.
💻 #InformationTechnology
I.T followed closely with:
▶️ 107 deals concluded in 2023
This pace of dealmaking brought I.T into the top 3 sectors by deal volume, highlighting the ongoing innovation and digital transformation within African economies. Companies providing SaaS, affordable internet, and cyber security services drove considerable attention from investors.
🌱 #CleanTech and #ClimateTech
Growing momentum on sustainable solutions attracted increasing capital:
▶️ 87deals in 2023 with a total value of US$471mn, up from 80such deals in 2022
▶️ Clean and ClimateTech emerged as the second most active vertical amongst technology or tech-enabled startups that successfully raised venture capital in 2023
🤖 #ArtificialIntelligence
The report shows early signs of investor confidence in Africa’s AI capabilities:
▶️103 VC deals with a total value of US$641mn between 2022-2023.
▶️a focus on the application of AI to leapfrog legacy infrastructure and revolutionise traditional sectors such as finance and healthcare.
Download the full report for more insights:https://bit.ly/3TA47ot
By Region
🌍 Mapping Africa's 2023 VC Landscape by Region ⭐ Southern Africa Signals Return to the Forefront of African VC Download the full report for more insights:https://bit.ly/3TA47ot
⚡ West Africa: a VC Powerhouse
#WestAfrica maintained the top spot for the third consecutive year, attracting 26% of all deals across the continent, driven by:
🔸 Nigeria leading the pack with 19% of total deal volume.
🔸The region’s private capital landscape fostering innovation and attracting investment.
#SouthernAfrica emerged as joint runners-up concluding the year with 114 venture capital transactions and total reported value of US$577mn, up from US$481 million in 2022.
🔸 This marks a significant rebound for the region after a few years (2020-2022) of steady declines in deal activity. Southern Africa was the only region to register positive year-on-year growth in 2023 at 20%, signalling a return to the forefront of venture capital on the continent.
#AfricaVC #Startups #Nigeria #AfricanPrivateCapitalAssociation
By Gender
✨ Diversity in African #VentureCapital!
AVCA’s 2023 #VentureCapital report reveals 27% of funding recipients were led by female founders or diverse teams, maintaining the steady stream we saw in 2022.
The year welcomed a few more names into these influential roles. South African fund manager Edge Growth Ventures named Janice Johnston as their new CEO in July 2023; Christine Namara joined Flat6Labs as Partner overseeing the firm’s US$95 million Africa Seed Fund; and Aduna Capital, led by General Partner Surayyah Ahmad, announced the firm’s US$20 million maiden fund, with a goal of having 50% female participation in the firms it supports.
While there’s still a way to go, this positive step underscores the growing importance of inclusivity in Africa’s startup ecosystem. Together we can advocate for a future where diverse voices and perspectives are empowered to drive innovation and success.
Download the full report for more insights:https://bit.ly/3TA47ot
#AfricaVC #Startups #GenderEquality #Inclusion #femalefounders
By Investor Location
🌍International Investors Pull Back From Africa: A Shift in Sentiment?
🔸Dramatic drop in active investors: Compared to a record-breaking 2022, the number of investors active on the continent decreased by 33% in 2023.
🔸 North American Exodus: This decline was primarily driven by North American investors, who accounted for 50% of the withdrawal.
🔸Shifting Priorities: This retreat reflects a broader cachange in investor sentiment due to worsening global market conditions.
💡 What does this mean for #VentureCapital in Africa?
🔸 It highlights the cyclical nature of international investor engagement with Africa; with foreign investment often influenced by global economic trends;
🔸 and underscores the importance of indigenous capital with a long-term view for Africa’s growth.
Download the full report for more insights:https://bit.ly/3TA47ot
#AfricaVC #InvestmentTrends #GlobalMarkets
