Rolling in the Dough💸
Getting funding in 2024!
Hello Venturer,
While Africa has attracted numerous investors over the years, it appears that enthusiasm is dwindling. In 2023, there was a significant 39% year-on-year decline in African startup funding. What’s the way forward for startups?
In 2022, Oluwatosin Ogunjuyigbe of Ventures Africa highlighted the lack of "unicorns" in Africa's digital economy, suggesting that initial optimism has given way to closer scrutiny. Investor Stone Atwine of Eversend echoes this sentiment, emphasizing the need for concrete data over "vibes" and warning against inflated valuations. As a result, funding is increasingly flowing towards safer bets like bond issuances and syndicated loans, with investors prioritizing metrics like sales, revenue, and cash flow. This shift suggests a move away from hype-driven valuations and towards tangible business impact.
Join us at 4 PM on Friday, 26th of January, 2023 at Ventures Africa's LinkedIn Audio Event to discuss Getting Funding in 2024.
VA Poll
Recently, we asked our LinkedIn audience their thoughts on the decline in African startup funding. The feedback we got indicates that a majority of respondents (47%) believe that the main reason for the decline in African startup funding is increased investor risk aversion. This suggests that investors may be more cautious and less willing to take risks in the current environment. 33% attribute the decline to the global economic downturn, emphasizing the broader economic conditions' impact on funding. A smaller percentage (13%) thinks that the lack of attractive startups in Africa is a contributing factor. The "Other" category, chosen by 8% of respondents, allows for additional, unspecified reasons.
Our Twitter Space
Despite significant investments, the Africa Cup of Nations (AFCON) in Côte d'Ivoire is experiencing low attendance. According to a recent Ventures Africa analysis, with tickets starting at around $8, prohibitive costs and logistical difficulties, including expensive airfares, are limiting attendance for many citizens of participating countries. These challenges add to concerns about the current economic downturn in Africa and raise questions about whether AFCON's low attendance could serve as a broader symbol of this economic hardship.
Join us at 4 PM on Tuesday, 30th of January, 2023 at Ventures Africa's Twitter Space to discuss ‘Why are AFCON Seats Empty?’
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