By Milcah Tanimu

A recent report by research firm Africa: The Big Deal reveals that the funding raised by Nigerian startups in 2023 plummeted to its lowest point in at least three years, reaching $410 million compared to $1.2 billion in 2022. This decline caused Nigeria to lose its position as the top startup funding destination in Africa to Kenya.

Although Nigeria still claimed the highest number of startups raising $100,000 or more (146, constituting 29% of the continent), the amount raised saw a drastic year-on-year reduction of 67%. As a result, Nigeria’s share of Western African funding continued to decline, reaching 68%, down from 85% in 2021 and 77% in 2022, marking the lowest regional share of any Big Four market since data collection began in 2019.

In contrast, Kenya attracted the most funding in 2023, securing just under $800 million, constituting 28% of the continent’s total. Despite a 25% decline year-on-year, Kenya’s share of Eastern Africa’s funding grew from 86% in 2022 to 91% in 2023.

The report also highlighted Egypt as claiming the second spot among the Big Four, with 48 ventures raising $100,000 or more in 2023. Egypt’s share of North African funding increased from 72% in 2022 to 95% in 2023, marking a strong progression.

South Africa retained the highest share of regional funding at 97%, with 70 startups raising over $100,000, accumulating $600 million in funding. Unlike the other Big Four nations, South Africa did not experience a decline in total funding between 2022 and 2023, seeing an 8% year-on-year increase.

These findings indicate a significant shift in the startup funding landscape, with Nigeria facing a notable reduction while other African countries experience varying degrees of growth and stability.