African startups raised $123.4 million in July 2023

At the end of July, African startups jointly raised $123.4 million across 20 disclosed deals, according to BD Funding Tracker. This is a 46.5% YoY decrease from the amount that was raised on the continent in July 2022. It is also a 2.8% decrease from what was raised in June 2023.

The trail was led by East Africa with startups in the region securing 37.5% of the funds raised in July, with Rwanda, Kenya, and Somalia raising $46.2 million. Central Africa followed in second place, which was surprising due to the absence of the region from the scene for a while. The region raised 32.8% of July funds, with DRC raising $40.5 million.

July saw West Africa and North Africa coming in third and fourth place with $26.6 million and $10 million raised respectively. While Southern Africa received no disclosed funding.

Here's a breakdown of July's funding

East Africa

A total of five startups from this region raised funds, with Kasha, a Rwandan health tech startup securing the highest funding at $21 million. Mydawa, a Kenyan startup followed with $20 million raised, we also see Farmworks also from Kenya raise $4.1 million and Revivo's preseed funding of $635,000. Caafisom, Somaliland's first ever funded startup raised $110,000 sparking hopes of the country becoming attractive to investors.

Eden Care, an insurtech company with a health focus based in Rwanda, has become a part of Y Combinator's summer cohort for the current year. As part of the accelerator's standard deal, Eden Care secured funding of $500,000. Remarkably, this marks Y Combinator's first investment in the Rwandan landscape.

Kenya dominated the region this month nabbing 53.8% of the funding that went to the region.

Central Africa

Following its impressive raise of $51 million in 2022, the region is once again in the news with DR Congo's cleantech startup, Nuru, securing a substantial $40 million in funding. Notably, this remarkable funding stands out as the largest amount raised by a single startup on the continent throughout the month of July. Meanwhile, DRC-based fintech startup Vaultpay was successfully accepted into Y Combinator's summer program, receiving the standard investment of $500,000 from the renowned accelerator.

West Africa

Nigerian startups led in July securing 99.8% of the funds raised by the region. Twende from Cote d'Ivoire raised $33,000 in funding. Nigerian startups that rocked the region's funding scene were, Terragon with $9 million, Moove with $8 million, Zuvy did $4.5 million, Propel followed with $2.74 million raise, MyCover raised $1.25 million, and then Clafiya with $610,000. One of the three startups accepted into Y Combinator's summer program was Nigerian food-tech startup, Chow Central which received $500,000 as part of the accelerator's deal.

The region was responsible for 21.6% of funding in July.

North Africa

Egypt dominated this region in July with three out of the four startups that disclosed what they raised. We recognize the efforts by Moroccan and Tunisian startups trying to break the monopoly of Egypt in the region's fundraising map. Moroccan prop-tech startup Agenz raised $1.3 million in funding and Tunisian mobility startup Kaco announced an undisclosed funding round. Egyptian startup, Flash raised $6 million, then there's Masroofi with $1.5 million, and Exits MENA with $1.2 million. While Menthum and Cayesh both announced undisclosed rounds of funding.

Sector/Industry

In July, cleantech startups maintained their prominent position, securing 32.4% of the total funding raised, with Nuru's impressive $40 million round leading the way. The sector also led in June with $52.3 million, which is 41% of what was raised.

Besides cleantech, other thriving sectors in July 2023 included fintech with $21.7 million, health tech with $20.7 million in funding, and logistics with $21 million secured in investments.

2023 has been a very challenging year for African startups, with H1 suffering a 47.69% decline in funds raised compared to H1 2022. $1.3 billion was raised in the year's first half, compared to the first half of 2022, where startups raised $3.1 billion.

Stage

In July, pre-seed startups took the lead, with Nigeria-based invoice financing startup, Zuvy, securing an impressive $4.5 million in funding, marking the highest pre-seed investment for the month. Following Zuvy's remarkable raise, two other startups, MyCover.ai from Nigeria and Exit MENA from Egypt, secured equal investments of $1.2 million each.

The ecosystem saw three seed startups making significant strides. Flash, an Egyptian fintech startup, secured the highest seed funding of $6 million. On the other hand, MyDawa, a health tech startup, dominated the series A category, raising a substantial $20 million in debt and equity financing.

Has fintech funding really dropped?

From January to July, according to BD Funding Tracker, FinTech attracted 23% of the total investment in 2023 but this is 6.79% higher than what came to the fintech sector within the same time in 2022 which is $805.7 million. Does this slight increase in investment suggests that investors are beginning to consider the FinTech sector again, indicating renewed confidence in its potential? We will see about that.

Note: Tyme's $77.8 million pre-Series C was excluded from the list because the fund was not directly raised by Tyme Bank, the South Africa-based subsidiary of the Singaporean Tyme which has its primary market in Asia. Like this round, we have excluded other rounds that were outside our funding tracking methodology.

The month of July is a reflection of what the tides have been since H2 2022, 2023 has been slow following the funding market reset, which began in 2022. The funding landscape still lags significantly behind 2022, with a 35% decrease in funds raised during the same period. However, some regions, like East Africa and Central Africa, show promising signs with impressive fundraising by startups like Nuru and Kasha.

Cleantech startups maintained their leading position in securing funding, indicating a growing interest in sustainable and eco-friendly ventures. E-commerce/retail, health tech, and fintech also received considerable investment, highlighting the diversity and potential of various sectors within the African tech ecosystem.

As the continent's tech ecosystem continues to evolve, resilient entrepreneurs and innovative startups must explore alternative funding sources and growth strategies to unlock their full potential.

Note: This article has been revised to incorporate the funding raised from Y Combinator.