The African tech sector attracted only 7% less capital than in 2023, demonstrating resilience and securing $3.2bn in funding (equity and debt combined), according to the annual Africa Tech Venture Capital report by Partech.

Positive trends, such as increased investor participation and the rise of megadeals, are tempered by challenges including a slowdown in Series A and B deal flow, longer fundraising timelines, and a rise in extension rounds.

“After the first two quarters showed growth in deal count for the first time since the downturn, the momentum shifted in Q3 and Q4 even though a few Fintech megadeals helped steady the market,” said Cyril Collon, General Partner at Partech. 

“The African VC ecosystem remains resilient, mirroring the global VC market, but, interestingly, without benefitting (for now) from the AI-driven boost accounting now for 30% of the global VC funding. It’s driven by key sectors, particularly fintech, which continue to power forward, demonstrating the strength of the ecosystem and its foundational sectors,” he said.   

The African tech ecosystem saw a slight increase in active equity investors, marking a strong contrast to the previous year’s trend which saw the investor count drop by 50%. 

However, the 2024 investors were more active at Seed+ stage and less involved at Venture stage, compared to previous years. 

The report highlights an overall stabilization in terms of deal activity. While the number of deals has decreased across most stages, except for Series A, this decline is quite limited compared to 2023. 

In terms of ticket sizes, the African VC landscape saw a decline across most investment stages, particularly in Series A (-18%) and Series B (-27%). Seed stage, however, performed better, with ticket size growing 26%. Total funding amounts decreased across all stages except for Growth.

Nigeria, South Africa, Egypt, and Kenya continued to dominate the market but to a lesser extent (67% of 2024 total vs. 79% in 2023). Nigeria reclaimed its position as Africa's top VC investment destination in 2024, leading in both equity funding and deal count.

The country secured $520m in equity funding (+11% YoY), driven by notable high-value deals. Interestingly, even without these megadeals, Nigeria would still have retained its top spot in VC investment.

South Africa raised $459m in equity last year, a 16% decrease compared to 2023 for a total of 67 deals, down 19% compared to 2023. South Africa was home to one megadeal that saved the market from a drop of 69% compared to 2023.

“In 2024, with the exception of Nigeria, all of the top 4 markets experienced a decline in funding,” said Tidjane Dème, General Partner at Partech. “However, in terms of deal number, Egypt stood out with a 48% increase in deal count, signaling a renewed energy in its VC ecosystem.”

Outside of the top four countries, Ghana, Morocco, and Tanzania are the only other countries to surpass the $50m equity funding threshold.  

Francophone African countries now account for 55% of the total equity funding volume within the broader rest of Africa group, underscoring their continued appeal outside of the top four. However, this represents a significant decline from their 68% share of total funding of rest of Africa in 2023.

Fintech continued to dominate Africa's tech ecosystem, securing $1.3bn, equivalent to 60% of total equity funding. 

The sector garnered 131 deals, accounting for 29% of the transaction count. 

Fintech is growing 16% YoY in deal count and 59% YoY in total funding, making it an active and growing ecosystem on its own.  

In 2024, gender parity deteriorated as female-founded startups raised a smaller share of deals (18%), as well as funding (7%), compared to 2023. Agritech was an outlier: it showed the most progress and reached gender parity in terms of funding.

Lastly, while the amount and volume of debt deals decreased, debt still represented 31% of the total $3.2bn (vs. 35% in 2023), confirming the growing access to debt capital in Africa.

However, access to debt still comes with significant constraints. Most of the available debt remained labelled in USD with high interest rates, and a comprehensive transformation of the offer is yet to happen to meet the unique requirements of African startups.