The sixth annual Venture Capital Activity in Africa report has revealed that Africa’s venture ecosystem experienced a 22% decline in deal volume and a 28% drop in deal value in 2024.
According to the report released yesterday, African startups collectively secured 487 deals throughout the year, comprising 427 venture capital deals worth $2.6 billion and 60 venture debt deals totaling $1 billion. Despite the overall decline, the median VC deal size rose to $2.5 million, marking a 32% year-on-year increase, indicating that while fewer deals were completed, those that did were larger in value.
Funding was concentrated at two key stages: early-stage and mature ventures, while mid-stage companies faced increased challenges in securing capital. The report also highlighted greater efficiency in follow-on funding, with the average time between funding rounds shortening—seed to Series A taking 14 months, Series A to B taking 19 months, and Series B to C taking 25 months.
West Africa retained its position as the region with the highest deal volume for the fourth consecutive year, led by Nigeria, which accounted for 16% of all deals. Although overall deal volumes were lower, multi-region deals attracted the highest total capital, while the ‘Big Four’—Nigeria, Egypt, Kenya, and South Africa—accounted for 55% of all deals and 64% of total capital raised.
Multi-region startups ranked first in Africa by deal value, with a shift in strategy from pan-African expansion to broader emerging market opportunities. Many later-stage African startups are now using their funding to scale operations into markets like Southeast Asia and Latin America.
The financial sector remained the most active by deal volume (30%) and attracted the largest share of capital (59%). FinTech and digital banks led the way, raising $1.4 billion across 116 deals. Meanwhile, clean and climate tech saw significant growth, doubling its share of tech-enabled deal volume to 13% in 2024.
Artificial intelligence (AI) also made notable strides, emerging as one of the top four most-funded sectors with 42 deals valued at $108 million.
Investor participation in African VC declined, with 614 active investors in 2024, a 21% drop from the 774 recorded in 2023. However, for the first time, African investors formed the largest group of active venture capital participants, making up 31% of the total.
The report also noted that venture-backed exits in Africa are steadily increasing, with 138 exits recorded between 2019 and 2024. Though exits remained flat in 2024, there is a clear upward trend. Trade sales continued to dominate as the preferred exit strategy, making up 84% of all exits, with an average holding period of 3.8 years.
Furthermore, between 2015 and 2024, $2.7 billion in capital commitments was raised by 35 unique fund managers across 41 funds, underscoring continued investment interest in the African startup ecosystem.
