Venture Capitalists Money in Africa Hits $50 Billion—Report

Venture Capitalists Money in Africa Hits $50 Billion—Report

Venture capitalists have pumped about $50 billion into the African investment ecosystem in the last decade, the African Private Capital Association (AVCA) said in a report. The amount remains small when compared with global funding size in the same period.

AVCA said against this broader backdrop of mixed global recovery, 2024 was a challenging year for Africa’s venture capital ecosystem, which registered double-digit declines that outstripped all other regions in scale.

The report highlighted that 2024 reveals a venture capital landscape that is slowly inching toward stability, although progress is neither uniform nor assured. Africa’s entrepreneurial ecosystem secured a total of 487 deals in 2024—427 as venture capital and 60 as venture debt, according to the Africa Venture Capital report.

 “While overall activity continued its downward trajectory, the volume of venture capital deals concluded in 2024 is particularly striking because it dropped below the five-year average”, AVCA said.

The report stated that at best, this outcome may signal increased investor judiciousness, where those on the receiving end of the year’s deal activity represented the ‘best’ of Africa’s startups, having successfully navigated sub-optimal market conditions.

Alternatively, it may indicate a sustained and unpredictable decline in investor appetite for early-stage opportunities on the continent.  Venture debt, by contrast, exhibited modest resilience, achieving a 5% year on-year increase despite an otherwise subdued market environment.

Nevertheless, the broader picture underscores this cumulative slide. Venture deal activity across Africa fell by an average of 13% every half-year since 2022, and culminated in the 2024 tally representing only 81% of the deals struck in 2023 and 57% of those in 2022.

Much of this shortfall can be traced to Nigeria, South Africa, and Kenya, three of Africa’s “Big Four” markets, which together accounted for two-thirds of the decline.

Despite a thinner deal pipeline, African startups demonstrated strong global competitiveness at later funding stages. At the Series B and Series C stages, African startups posted median deal sizes of US$29 million and US$38 million, respectively—surpassing the global averages of US$21 million (Series B) and US$35 million (Series C).

In 2024 specifically, African ventures collectively secured US$3.6 billion, split as US$2.6 billion via equity and US$1 billion through debt.

While venture debt comprised only 12% of deal volume, it assumed a far more substantial 37% of deal value in 2024— indicating a strategic shift in the capital-raising strategies employed by African founders.

Median deal sizes in 2024 stood at US$2.5 million for venture capital and US$7.5 million for venture debt, reinforcing venture debt’s increasingly important role in the startup financing toolkit.

Despite the insulation of venture debt’s stable performance in 2024, the US$2.6 billion raised in 2024 is a pale shadow of totals recorded in previous years; comprising three quarters of aggregate funding in 2023 and a more diminutive half of funding amassed in 2021 and 2022.

Perhaps most striking is that the entirety of venture capital raised in 2024 is nearly equal to that raised in a single quarter at the height of Africa’s bull market, which saw Q3 2021 close out at an unprecedented US$2.2 billion. #Venture Capitalists Money in Africa Hits $50 Billion—Report Yield Slides on Post Auction Demand for Nigerian Treasury Bills