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Accelerators Take the Lead in Funding as Africa’s VC Investments Plunge by 54% in H1 2023


The African startup ecosystem witnessed a notable downturn in the first half of 2023, as revealed by data from venture capital data platform MAGNiTT. During this period, venture capital firms invested $951 million in the startup ecosystem, marking a 54% decline compared to the previous year’s first half. The number of completed deals also experienced a substantial drop of 50%, with VC firms finalising 214 deals with 1 mega deal in 2023

Despite a decline, fintech remains a favourite among VC firms, as fintech startups managed to secure 29% of the overall funding while E-commerce,transport and logistics startups obtained  12% and 11% of the total financing, respectively.

Notable investments include Mt Halan, a fintech startup that received $260 million in February, Tyme Bank $78million in  May and M-okpa, a transport & logistics company, also raised $55 million in May.

In terms of deals, Nigeria was at the forefront, with Kenya and South Africa following. However, when considering the value of deals, Egypt was the continent’s leader, primarily fueled by the $260 million investment in MNT Halan in February. South Africa came next, experiencing a 3% decrease in deal value, followed by Nigeria.

Interestingly, most investments this half of the year were led by accelerators, not VCs. They were responsible for five out of the top 10 investments during this time. The four most active investors were all accelerators, with ARM Labs Lagos, Catalyst Fund, The Baobab Network, and Norrsken Global leading the pack, making 13, 19, 9, and 8 deals, respectively.

Regarding the value of investments, the top 10 are all foreign investors, led by Chimera Capital, Tencent, Blue Earth Capital, Sumitomo Corporation, and Apis Partners. Concerning exits, there have been 15 so far, which is 25% of the total 60 exits expected on the continent in 2022. Kenya has reported the most exits so far, with four.

Investors appear to be shifting their focus to early-stage startups as the VC funding crunch persists, with 57% of total investment into the continent going to early-stage businesses, a 5% rise from 2022 statistics.


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