The year 2024 saw a decline in investor activity across Africa, with fewer investors engaging in deals compared to the previous years.
According to Africa:The Big Deal, in total, 430+ start-ups across the continent raised at least $100,000, each supported by a combination of investors.
“While this remains a significant number, it’s a marked drop from 520+ investors in 2023, and far below the 1,000+ investors involved in similar-sized deals in 2022,” the report noted.
Additionally, it stated that the number of investors supporting African start-ups has been shrinking over the past few years.
“In 2024, just 430+ investors participated in $100k+ deals, a 16% decrease from 2023 and a more than 50% drop from the investor figures in 2022. This downward trend reflects a broader global caution, as investor activity in Africa slowed, in line with a global tightening of investment budgets.”
Moreover, investors are reported to be making fewer deals.
In 2024, a full 69% of investors were involved in only one $100k+ deal, the highest proportion since at least 2021.
In comparison, the number of highly active investors—those participating in more than ten deals—also dipped dramatically. While 28 investors were active at this level in 2022, only 8 investors reached this threshold in 2024, consistent with the decline seen in 2023.
The Serial Investors: Who’s Still Leading the Charge?
Despite the overall slowdown, a core group of serial investors has continued to make their mark.
Leading the pack is 54 Collective (formerly Founders Factory Africa), the most active investor of 2024. With 26 deals, averaging more than two investments per month, they were the only investor to surpass 20 $100k+ deals. This consistent commitment to the African market has helped them maintain their top position.
Other top investors that have remained active over the years include Techstars, Launch Africa, and Catalyst Fund.
All of these have participated in fewer deals compared to 2023, but their consistent presence reflects a continued interest in Africa’s start-up ecosystem. These investors have also managed to maintain a strong foothold in the region despite the declining numbers.
In contrast, four new investors saw a notable increase in activity this year: Digital Africa, Baobab Network, Renew Capital, and EdVentures.
Their rise reflects growing interest in the African market from players willing to step up even as others pull back.
The Shift in Investor Behavior: Quality Over Quantity
According to the report, this shift towards fewer but more selective investments might suggest that investors are taking a more measured approach to their strategies in 2024.
“This is partly attributed to the fact that many of the most active players are focused on raising their next fund, which can take considerable time and resources away from ongoing investments. Despite the slowdown in deal frequency, the fact that there is still a substantial pool of “dry powder” (capital that remains uninvested) indicates that Africa’s start-up ecosystem remains an attractive proposition for those with long-term interests.”
Many of the investors who have been less visible recently are still very much vested in the continent, particularly as exits and returns from past investments are still pending.
Notable Absences: Investors Who Slowed Down
While the most active investors have remained engaged, some notable names have dramatically reduced their involvement.
Y Combinator, once a powerhouse in African investments, only participated in 9 deals in 2024, a far cry from its peak in 2021 and 2023, when it was involved in 37 and 43 deals, respectively.
Other investors like 500 Global and Axian Group also made fewer investments this year compared to prior years.
Conclusion: A Market in Transition
The report suggests the reduction in investor activity in Africa does not signal a mass exodus, but rather a shift in focus and strategy.
As investors raise new funds and adjust to the economic climate, the African market remains an area of high potential.
However, the days of rapid growth and overwhelming investment volume appear to be on pause.
“The future of African start-ups will likely depend on a select group of committed investors, with an eye toward the long-term potential of the continent’s emerging economies. With new funds still being launched and the promise of exits on the horizon, Africa’s start-up ecosystem is not abandoning its supporters; it’s simply becoming more selective—and perhaps, more resilient.”