Only Four African Countries Secured>$100m Funding In 2023 + Stark Decline Realities

The curtains may have closed on 2023, but the African tech landscape is still adjusting to the aftershocks of a watershed year that tested the resilience and adaptability of startups across the continent. To make sense of it all, TechCabal Insights has released its retrospective State of Tech in Africa Report for Q4. Its analysis is comprehensive and delves into the critical aspects that shaped the ecosystem while offering actionable insights for the journey ahead.
Our report is divided into five key sections. The funding winter unmasks the realities of doing business in Africa. Simply put, 2023 was a difficult year for African startups, with only four countries raising above $100 million in funding. By comparison, eight African countries raised above that figure in 2022.

Venture Capital (VC) experienced a funding decline of 40.2% compared to 2022, forcing innovative entrepreneurs to explore alternative avenues. However, fintech stood strong, maintaining its status as the most funded sector despite a 79% dip in funding.

Weathering the storm explores the strategies for growth and adaptation. One silver lining was the utility of mergers and acquisitions as a startup lifeline, which will remain a mainstay in 2024. For all the challenges faced, 2023 still recorded the single largest acquisition deal in the history of African tech, with fintech, once again, being the pacesetter. The report also examined multimarket models and pivots, highlighting notable examples that can serve as a compass for investors needing a strategic shift.

Regulation and policy look at the regulatory framework shaping African tech as policymakers and innovators thread carefully between navigating the digital frontier and staying compliant, in line with best practices. It covers regulation around digital identity, financial inclusion, cryptocurrency, open banking, anti-competition and data protection.

For our two-part survey, we collated primary data to provide a nuanced understanding of the impact of tech layoffs on the workforce and a founders’ outlook for 2024, offering a real-time pulse on the sentiments within the tech community.

Lastly, we provide an outlook for the future. What does the uncharted terrain look like? Can bootstrapping take the place of VC funding? What imperatives lie ahead for founders, investors, and policymakers alike? Which trends from the past can serve as a prognosis for 2024? What multipolar forces will define Africa’s digital economy in the future?

The answers to these and more can be found in our State of Tech Report Q4. Click this link to download it. We also value your feedback. Help us fill this brief survey to let us know how our reports can serve you better.