African startups raised $2.2 billion in 2024, a combination of equity investments, debt, and grants. This accounted for just 0.6% of the total $275 billion global startup funding, highlighting the massive funding gap between Africa and the rest of the world.
Despite an 11% drop in equity funding compared to 2023, Africa performed better than Asia, which saw a 27% decline, driven largely by China’s 56% drop in startup investments (Source: Africa: The Big Deal).
So, how is Africa’s startup ecosystem performing in comparison to the rest of the world? Let’s break down the numbers.
How Much Funding Did African Startups Receive?
African startups secured $2.2 billion in total funding from various sources:
- $1.5 billion came from equity funding
- The remaining $700 million was raised through debt financing and grants
Although equity funding declined by 11% YoY, Africa has shown long-term resilience, with startup funding growing 62% since 2020—from $0.9 billion in 2020 to $1.5 billion in 2024 (Source: Africa: The Big Deal).
Africa’s Funding Gap vs. the World
Africa continues to receive less funding than expected, considering its 1.4 billion population (18% of the world’s total) and its 5% share of global GDP. In 2024, African startups raised about the same amount of equity funding as Miami ($1.8 billion), a single U.S. city.
Compared to other regions, African startup funding remains significantly lower:
- India, which has a similar GDP and population size to Africa, saw 40% growth in startup investments.
- North America and Latin America experienced 21% and 9% YoY growth, respectively.
- Global startup funding increased by 4%, while Africa saw a contraction.
While Africa remains an emerging startup ecosystem, these figures indicate that investors are still hesitant to back African startups at the scale seen in other regions.
Long-Term Trends
Despite the 11% decline in equity funding in 2024, Africa has performed better than many regions over the past four years. Since 2020, startup funding in Africa has increased by 62%, while other regions have struggled to maintain pre-pandemic levels:
- China has seen an overall 78% decline in startup investments.
- Asia as a whole is down 54% compared to 2020.
- Latin America has also dropped 33% since 2020.
These numbers highlight that, while funding remains low, African startups continue to attract investment and grow, unlike some regions that have struggled with steep declines.
What This Means for African Startups
The $2.2 billion raised in 2024 shows that while Africa’s funding ecosystem is growing, challenges remain:
- Africa is still an untapped investment opportunity – Despite strong entrepreneurial talent and innovation, global investors have not fully tapped into Africa’s potential.
- Startups must look beyond equity funding – Debt financing, grants, and alternative funding sources will play a bigger role in sustaining startup growth.
- Investor confidence needs to improve – More successful exits and high-growth startups will help build trust and attract more global investors.
Funding Opportunities for African Startups
If you’re an African entrepreneur looking for funding, consider applying for the Tony Elumelu Foundation (TEF) Entrepreneurship Programme, which provides $5,000 in seed capital, mentorship, and business training.
