They’re not copycats, they’re smart iterators
This article was contributed to TechCabal by Timothy Motte, through The Realistic Optimist, a paid newsletter covering the globalised startup scene. An ode to simplicity Paul Graham, Y-Combinator’s founder, excels at simplicity. His essays are crisp, his sentences are short and his ideas are clear. A visit to YC’s FAQ page shows that his ethos irrigated the institution he created. Answers are crisp, sentences are short and ideas are clear. Despite the diversity of startups it deals with, YC seems obsessed with simplifying how it accompanies them. Consider this elegant business model categorisation. Distilling complex ideas to the bare minimum is an underrated skill. In many cases, simplification rectifies unnecessary complexity (think financial jargon for simple concepts). In other cases, simplification spots what matters in a sea of mostly irrelevant information. Both paths achieve the same thing: the ability to clearly see what others can only slightly perceive. Seeing stuff clearly is essential to moving in the right direction and avoiding obstacles. It is the difference between crossing the street and getting hit by a car. Simplifying the global startup scene In the past decade, tech startups have sprouted around the world. At first glance, this trend seems awfully difficult to apprehend. Startups in Sudan, Estonia, or Brazil can’t even be compared, right? Surely, political, social, economic, and cultural differences between countries demand a bespoke approach to startup building. That supposed complexity hasn’t really materialised. The tech startup phenomenon has globalised with mundane predictability. Successful startups around the world strongly resemble each other. Shrewd investors are able to predict what startup will function in Geography A by looking at what has worked in Geography B. This isn’t surprising and boils down to a single fact: people’s needs are the same, regardless of where they live. So, logically, the services they need will be the same. It’s actually quite simple. Smart iterators Many successful startups in non-Western markets have embraced that concept. Copy what works abroad and tweak it to local market specificities. Until all successful Western startups have an equivalent in emerging markets (EMs), there’s space for that approach to work. Careem is a great example. Careem essentially started out as the “Uber for the Middle East.” That is, it took a concept that has met clear customer demand in the West and adapting it locally. The macro approach was devilishly simple (copy-paste Uber’s ride-hailing app concept), enabling mental energy to be spent on localising the details. Careem facilitated cash payments for rides, cognisant that the region’s cash usage was high. It adapted its product to local gender dynamics recognising that, for example, Saudi women being barred from driving meant they would make great customers (Saudi women have since gained the right to drive). Careem built an in-house mapping system since the available ones were subpar. That made it hard for the Western competitor, Uber in this case, to compete. They lacked the cultural comprehension Careem had, despite having come up with the original idea. In 2019, Uber acquired Careem for $3.1B. Many if not all of the Middle East’s successful startup exits have followed that model. Souq (an e-commerce marketplace) was acquired by Amason. Maktoub (an email provider) was acquired by Yahoo. Anghami (a music streaming app) IPO’d on the NASDAQ after a rumoured acquisition offer by Spotify. Tech startups’ globalisation follows simple patterns. In the vast majority of cases, startups in young ecosystems can succeed by replicating what has worked abroad and tweaking the details to fit local conditions. Let’s call them “smart iterators”. These smart iterators can, in turn, be copied. Take Fawry, an Egyptian unicorn building (among other things) payment rails for unbanked people. This inspired Cashi to build something very similar in neighbouring Sudan. This is normal and smart. Fawry even invested in Cashi. In the simplest of terms: successful tech startups around the world are locally-relevant replicas of what works elsewhere. There is rarely a need to reinvent the wheel. It’s the same for ecosystems Startup ecosystems follow the same logic. They all have the same goal: to create tech companies that dust off rusty industries, foster new ones, and create high-quality jobs. In that quest, all ecosystems need the same ingredients: adapted legislation, enthusiastic investors, and local talent. Whether in Argentina, Indonesia, or Poland, the equation is the same. Once again, getting these ingredients right is a matter of seeing how others did it. The problem ecosystem A is facing has likely been faced (and solved) by ecosystem B. You might as well copy-paste what ecosystem B did, and refine the details to local conditions. The American model used to be the only available proxy, which was helpful in some aspects but not in others. For one, the American ecosystem has never dealt with the “brain drain” issue plaguing many EM ecosystems. The startup scene’s globalisation has increased the number of proxies young ecosystems can seek inspiration from. Ecosystem builders can now choose which national ecosystem they feel legislatively or economically close to and gain contextually relevant ideas. For example, Senegal’s “La DER” was likely inspired by France’s “Bpi”: an umbrella organisation lobbying for, federating and financing the local startup ecosystem. Senegal has an easier time relating to the French way of doing things than the American one, owing to colonial era-induced legal similarities. Another example. In fostering an angel investor community, Jamaica will gain more inspiration from North Macedonia than from how America did it decades ago. Despite geographical separation, both Jamaican and North Macedonian startups operate in a similar context: small country, severe brain drain and an economy dominated by “old” money. The solutions North Macedonia is coming up with, which themselves may be inspired by another ecosystem such as Estonia, can be hyper-relevant to Jamaica. A final example: Saudi Arabia is looking to turn its small-cap stock market, Nomu, into a hub for local startups to list. While doing so, Saudi might heed warnings from the Japanese ecosystem. Japan made a similar move about two decades ago with its “Mothers”
Read MoreWant your rice with a side of ads? Chowdeck is working on an ad product
For the rollout of Ayra Starr’s album ‘The Year I Turned 21,’ her record label Mavin made an unusual marketing choice: adverts on the food delivery app Chowdeck. “[Mavin] was looking to raise as much awareness for the album as possible,” one person close to the label told TechCabal. “A lot of young people will spend the last of their funds to buy food online and Chowdeck is the most popular [destination.]” anyone ever seen something like this? all my friend wanted to do is order his food ffs and he’s looking at Ayra Starr. pic.twitter.com/ABJxEhfsOF — benny. (@benny7gg) May 31, 2024 Fintechs like Yellow Card and Cenoa have also advertised on Chowdeck, showing that food delivery apps, whose users are typically young and tech-savvy, offer high-quality leads for advertisers. One fintech executive who has previously advertised on the platform described Chowdeck’s users as a “premium target audience.” Feedback like that is driving the development of a “proper ad product,” said one person familiar with the matter. The conversation around a core ad product is still in the early stages, and until then, sales staff are expected to continue pitching the existing ad offering to clients. Chowdeck declined to comment on inquiries about it. In 2022, Chowdeck charged ₦4 million to send push notifications (PN) to its 200,000 users, according to a rate card seen by TechCabal. Having grown its monthly users, those rates have likely increased. Other advertisement options include SMS, in-app banners, blog content, social media posts, and offline marketing such as branded rider t-shirts. “[Adverts on food delivery platforms] work in the same way as advertising with media companies that produce content,” Bolaji Anifowese, Head of partner marketing at Distrobird, a sales automation startup, told TechCabal. The true cost of convenience: Why you pay more when you order food online Like media platforms, the apps take advantage of every surface on their app or web platform to grab the users’ attention. The only difference is food delivery apps immediately have the attention of users looking to spend money. It’s the competitive edge that food delivery apps have over other media advertisers. For years, e-commerce platforms offered in-app advertisements to make extra revenue with comparatively little operating cost. Jumia, which previously boasted of quadrupling the sales of global consumer brand Reckitt Benckiser, on its platform, in one year, charges ₦15,000 for 37,500 impressions on 10 sponsored products. These ad placements have been limited to sellers and brands on the platform—restaurants and malls in the case of food delivery apps like Chowdeck. In emerging markets like Indonesia, leading food delivery platforms like Grab and GoFood hosted in the super app Gojek, offer ad placements. In more mature markets, food delivery platforms have reported that their ad revenues contribute significantly to revenue. If Nigerian food delivery startups ramp up their in-app advertising to get a slice of the in-app advertising market projected to grow to $144.2 million in 2028, there is a risk of bombarding and consequently irritating those who simply want to buy food. “The balance may be in ensuring that [Chowdeck] does not place the ad in ways that seem intrusive for the users,” Anifowese told TechCabal. Well, only a few people would mind eating their amala or rice with a handful of ads if the adverts come with discount codes, as some already do, that make the food cheaper. *Additional reporting by Emmanuel Nwosu.
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Running out of steam? Kenya protests are off to a slow start in fourth week
In its fourth week, Kenya protests started slowly but could pick up steam later today. For now, Ruto will count it as a win. On Tuesday morning, Kangemi, a Nairobi suburb did not look like the epicentre of a crucial protest. While it has hosted thousands of protesters in the past three weeks, only a few hundred protesters were in Nairobi’s chilly streets on Tuesday morning, suggesting public anger may have subsided. In Nairobi, traffic interruption is minimal, and no major roads have been blocked. The situation is similar in other cities and towns like Nakuru and Machakos. Muted protests are also ongoing in Mlolongo and Kitengela, towns on the outskirts of Nairobi. It will count as divine intervention for President William Ruto, who asked for prayers on Sunday as public support for his government reached critical lows. He has made concessions to pacify Kenyans, withdrawing the controversial tax bill, slashing the budget, and firing his cabinet. He will hope the slow start to today’s protest is a sign that the worst is over. On Monday, Ruto claimed the Ford Foundation, an international non-governmental organisation, is sponsoring the protests. “We ask the Ford Foundation to explain to Kenyans its role in the recent protests,” Ruto wrote on X on Monday “We will call out all those who are bent on rolling back our hard-won democracy.” The Ford Foundation denied the allegations and said it did not “fund or sponsor the recent protests against the finance bill and have a strictly non-partisan policy for all of our grantmaking.” The squabble with the Ford Foundation is something Ruto can afford after enduring three weeks that have turned him from media darling to persona non grata. He’ll need more prayers in the coming weeks even if these protests die out because Kenya’s debt crisis still needs a miracle. Have you got your early-bird tickets to the Moonshot Conference? Click this link to grab ’em and check out our fast-growing list of speakers coming to the conference!
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👨🏿🚀TechCabal Daily – Uncovering South Africa’s finfluencers
In partnership with Share this newsletter: Lire en Français اقرأ هذا باللغة العربية Good morning Heads up, Kenya, you may find it impossible to get rides using any of the ride-hailing services like Bolt or Uber. Ride-hailing drivers are on a five-day strike to demand fair pay, and the removal of value-added taxes. This isn’t the first time drivers have driven off the job. Frustrations have been boiling for years. Drivers in Kenya have gone on strike at least once a year since 2016, citing the same demands. These demands have almost always been denied because Bolt and Uber consider them self-employed, not regular employees. One solace came last year when the Kenyan transport authority ordered all ride-hailing services to reduce commission fees to 18%—with Bolt previously charging 20%, and Uber 25%. Will the government step in this time? More in our coverage here. In today’s edition IHS Towers market value dips by $6 billion South Africa to monitor financial social media influencers Skincare marketplace Uncover raises $1.4 million HostAfrica acquires Kenya’s deepAfrica The World Wide Web3 Opportunities Markets IHS Towers market value dips by $6 billion After the fanfare of a company’s public listing event, the lonely work begins. Becoming a public company means more scrutiny and the pressure to deliver impressive quarterly results or risk backlash from impatient shareholders. Publicly listed African companies are familiar with this dance. Jumia and Swvl have had their stumbles and IHS, which was listed on the New York Stock Exchange in 2021 for an opening price of $21, has seen the impatient side of investors in the last three years. Lately, The tower company once valued at $7 billion is now worth $992.5 million. IHS which has 40,000 towers across 10 countries has taken a beating in its biggest market Nigeria. The West African giant’s inflation is at an 18-year high, and a decision to float the naira in 2023 has not brought the price stability policymakers hoped for. According to its financials, IHS recorded loses of $1.9 billion in 2023 alone up from $470 million the previous year. These losses have mounted as alternative electricity sources needed to keep its base stations running in the country have become expensive. The retail price of diesel in Nigeria rose from ₦840.81 per litre in March 2023 to ₦1,341.16 per litre in March 2024. While IHS hopes to turn its fortune around, one company might be able to inspire it to find its footing again. Jumia which initially launched an initial public offering in 2019 at $14.50 a share saw its shares fall to about $3.36 last year. However, the company stock is up 150% this year alone, trading at $13.37 on Monday. Read Moniepoint’s 2024 Informal Economy Report 90% of businesses in Nigeria’s informal economy earn less than N500,000 in monthly profit. Click here to explore the financial profile of Nigeria’s informal economy from Moniepoint’s latest report. Creator Economy South Africa to monitor financial social media influencers Hiring a financial adviser is expensive, so most people settle for the next best thing: finfluencers. Finfluencers (financial influencers) are free, helpful and well, you can listen to them while you do the dishes. There’s just one problem: not all of them are licenced to give financial advice. So South Africa’s financial institutions market regulator, Financial Sector Conduct Authority (FSCA), wants everyone to be careful when taking financial advice from finfluencers. While finfluencers have undoubtedly played a role in boosting financial literacy and market participation—with nearly half of South African households now investing—the FSCA is concerned about the potential for misleading information and harmful investment advice. The play isn’t always profitable: Some finfluencers may prioritise personal gain over the best interests of their followers. This is particularly worrying given the high prevalence of investment scams in South Africa, with nearly seven in ten people either falling victim or narrowly escaping them. And almost half of that number (Gen Zs) take financial advice from these finfluencers. In Nigeria, this has played out many times, with celebrities endorsing fraudulent investments, especially pyramid schemes. One example is Davido’s Racksterli which garnered over 400,000 investors before it crashed in 2021. Enter Big Brother, the FSCA: To address these concerns, the FSCA is stepping up its oversight on finfluencers. By monitoring the content and investment recommendations made by these influential figures on social media, the regulator aims to protect consumers and maintain market integrity. While the FSCA recommends hiring a financial adviser instead to take you through your finances, it is understandable that only a few South Africans can foot the R2,000 ($110) monthly bill for this. Therefore, you should approach financial advice from finfluencers with caution. While they can be a valuable resource, conducting thorough research and considering multiple perspectives before making any financial decisions is crucial. Join Fincra at API Conference on July 20, 2024 Calling all devs!! This is your chance to dive deep into Fincra’s extensive suite of payment APIs and accompanying SDKs. Come and see how you can build your next big idea with easy-to-integrate APIs. Reserve your spot here! Funding Skincare marketplace Uncover raises $1.4 million COVID-19 didn’t just change the way we worked, it also changed the way we approached skin care. As people spend more time at home, skincare routines have become a norm, leading to increased purchases of skincare and beauty products. While women are major users of skincare products, African women often complain of not finding products that suit their skin. Enter Uncover, a Kenyan beauty and skincare company which specialises in formulating tailor-made skincare products for Africans. The startup uses data from users on its app to create personalised skin care products by partnering with top labs across the world. “The industry has represented only a few skin tones in testing and we are one of the first brands testing on women in Africa. What’s exciting is that we are starting in Africa but seeing global demand and opportunity for our solution,” Sneha Mehta, CEO of Uncover tells us. The
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Kenya ride-hailing strike: drivers demand fair pay, pricing power
Ride-hailing drivers in Kenya began a five-day strike on Monday to demand fair pay and the removal of value-added taxes; they marched to the National Transport and Safety Authority (NTSA) office at the end of day one. The strike comes ten months after the Transport Ministry compelled Bolt and Uber to reduce their commission to 18%. The drivers want to be included in Uber and Bolt’s pricing decisions and believe they’re entitled to this inclusion because they handle expenses like insurance and parking fees. “The person who sets the prices doesn’t bear the cost of running the business,” said Zakaria Mwangi, Secretary General of the Digital Taxi Association of Kenya. “Ultimately, the taxi apps determine the cost of each trip, not the driver.” They also criticise the platforms for charging taxes. “The taxi apps take 18% commission from the trip amount and then deduct the tax of this commission on a driver’s income,” said Mwangi. However, those taxes are paid to the government and don’t belong to the mobility companies. In a meeting in Nairobi on Sunday, the drivers said they would no longer shoulder the operational costs of their businesses while “the app companies continue to take their guaranteed income.” They called it an unfair business practice.” Bolt said it was “aware of the drivers’ strike and respects their right to peaceful demonstrations.” “We are committed to continuous engagement and collaboration with driver partners,” Bolt told TechCabal in a statement, side-stepping questions on commissions. Uber acknowledged the strike, and said it is “closely monitoring the situation and making every effort to minimise disruptions for users.” With the strike in place, only a handful of drivers are accepting rides, leading to surge pricing. The trouble with the ride-hailing apps and drivers comes down to an important detail: these drivers are not Uber or Bolt employees but “driver partners.” That partnership leaves the bargaining power in the hands of the companies who insist they only provide a platform for the drivers to earn and take a commission. The drivers are learning that this is the gag in gig work. Have you got your early-bird tickets to the Moonshot Conference? Click this link to grab ’em and check out our fast-growing list of speakers coming to the conference!
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IHS Towers market value dips by $6 billion since 2021 NYSE debut
When IHS Towers began life as a public company on the New York Stock Exchange ($IHS) in 2021, it was valued at $7 billion, making it Africa’s most valuable technology company. It has suffered a reversal of fortunes with losses increasing twenty-fold to $470 million in 2022 and climbing again to $1.9 billion by 2023 as operational and finance costs soared. While a significant portion of those losses is unrealised and linked to naira devaluation, skittish investors have reacted negatively, sending share price tumbling and wiping out $6 billion in market value. $IHS closed at $2.98 on July 14, 2024($992.5 million market value) continuing a downward trend that has persisted since its listing at $21 per share in 2021. In 2023, its second full year on the NYSE, the share price fell below $4.5. IHS Towers did not respond to a request for comments. The company’s attractiveness to investors depends on macroeconomic conditions in Nigeria, its primary market. IHS Towers is Africa’s largest infrastructure company with over 40,000 towers across 10 countries and three regions. Nigeria, where it counts MTN Nigeria–which owns a 26% stake in the tower company—and Airtel as clients, accounts for half of its revenue. Headline inflation in Nigeria is at an 18-year high and unstable FX prices have increased operational costs. IHS spent $88.8 million to power its towers across all its markets in Q1 2024; power is the company’s largest operating cost. Why IHS Towers is facing a shareholder revolt “Every base station you see in Nigeria is powered 24 hours a day by diesel generators,” said a telecom expert who asked not to be named. The average retail price of diesel in Nigeria rose from ₦840.81 per litre in March 2023 to ₦1,341.16 per litre in March 2024. According to a 2023 sustainability report, IHS began moving to solar and grid electricity, saving $20.2 million in power costs and maintenance. “As of December 31, 2023, in our African markets (excluding South Africa), 48% of our sites were powered with hybrid power systems (a combination of diesel generators with solar and/or battery systems), 12% with only generators and 32% with grid connectivity and back-up generators,” the company said in a corporate filing. Sam Darwish, the chairman and CEO said in a June 2024 Annual General Meeting that the company achieved commercial growth after renewing contracts with MTN and Airtel. “With MTN Rwanda MLA just signed, we have now completed all contact renewals and extensions with MTN outside Nigeria covering the five countries of Cameroon, Côte d’Ivoire, Zambia, Rwanda, and South Africa—a total of over 12,200 tenancies renewed or extended into the next decade,” Darwish said. However, shareholders want to see more revenue growth and lower operating costs, which may point to another problem for IHS: many of its shareholders have no patience with the complexity of the tower business.
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Nigeria’s inflation quickens in June as pressure to cut interest rates mounts
Headline inflation, a measure that tracks consumer prices in an economy, increased in Nigeria in June 2024 as people paid more for food, transportation, and energy. Data from the Bureau of Statistics showed inflation accelerated to 34.19% in June 2024 from 33.95% in May. It will worry policymakers counting on inflation to stall as talks of a nationwide protest gain ground. On Friday, the government suspended taxes and import duties on food items like maize and wheat for 150 days, one year after acknowledging a food emergency. It will likely lower food costs for the first time in over two years and ease political pressure on the CBN to lower rates. Despite this, a month-on-month increase in inflation between May and June will put talks of an interest rate increase on the table in the short term. Nigerian billionaire Aliko Dangote told reporters on July 3 that no growth could happen while interest rates remained at 30%. It’s a position held by many government insiders who believe CBN governor Cardoso—who has raised interest rates twice this year—should backpedal. So far, Cardoso has remained unmoved. The discussion will be back on the table at next week’s Monetary Policy Meeting (MPC). Empty wallets, empty bellies: Food inflation grips Nigerians Have you got your early-bird tickets to the Moonshot Conference? Click this link to grab ’em and check out our fast-growing list of speakers coming to the conference!
Read MoreSkincare e-commerce startup Uncover raises $1.4 million to expand into Ghana and Uganda
Uncover, a Kenyan marketplace for skin care products, has raised $1.4 million in seed funding. The company will use the fresh capital to expand into the US, Ghana, and Uganda. Launched in 2021 by Sneha Mehta and Jade Oyateru, Uncover uses data provided by users on its app–through quizzes, etc—to create personalized skin care products with top labs in South Korea. The company distributes these skincare products through its e-commerce platform and retail partnerships with pharmaceutical chains like Goodlife and Medplus in Kenya and Nigeria. “The industry has represented only a few skin tones in testing and we are one of the first brands testing on women in Africa. What’s exciting is that we are starting in Africa but seeing global demand and opportunity for our solution,” Sneha Mehta, CEO of Uncover, said. This is Uncover’s third funding round. It raised $100,000 in a 2021 pre-seed round from Antler VC and a $1 million seed round in 2022. In its latest funding round, Uncover provided exits for early investors through a secondary sale, according to its CEO. “Secondary sales were driven by demand. There was more demand than the round size,” Mehta said. The funding round was led by EQ2 Ventures and IgniteXL Ventures, with participation from Chui Ventures, Samata Capital, and Altree Capital. Uncover is playing in Africa’s beauty and personal care market estimated to grow to $83.19 billion by 2028. Skincare products have become an essential part of the daily routine of Africa’s young and fashion-savvy middle-class population, driving demand for these products. The startup claims to have over 200,000 users across Kenya, Nigeria, and the diaspora, and has grown its revenue 10x in the last 24 months since its last funding round. Uncover claimed it broke even in the past year and is on course towards profitability. “We are incredibly impressed with Uncover’s use of data and technology to understand their core customer’s needs,” Claire Chang from IgniteXL Ventures said.
Read MoreRuto asks for prayers as Kenyan protests enter fourth week
After weeks of social media hashtags asking Kenya’s Parliament to scrap a plan to raise taxes failed to convince elected representatives, thousands of Kenyans took their protest offline, arguing that a second tax increase in two years was excessive. The Kenyan government dug in, with Parliament passing the bill on the day of the protest and policemen killing at least 41 people. As the government responded forcefully, citizens became more insistent about their demands. Eventually, the tax proposals were scrapped on June 27, but the protests have continued with demonstrations scheduled for Tuesday and Thursday. It is the longest-running protest in Kenyan history and the key ask is the resignation of Ruto, a hustler popular with young voters just two years ago. The President, who has made significant concessions in the last two weeks, appears genuinely puzzled at how quickly public anger has calcified. On Thursday, he dissolved his cabinet and committed to reducing government overhead. He has also walked back some of his bluster from an ill-advised national address on the night of June 25. Yet it is too little, too late for Kenyans who want justice for the 41 protesters killed. The resignation of Police Chief Japhet Koome has not calmed a public that wants the policemen involved in the killings tried for murder. “Koome has resigned, but it should not end with resignation,” said Philip Kisia, a leadership and governance expert. The entire government, the Kenya Kwanza government, should have tendered its resignation.” At a church service in Nyandarua, a county 170km north of Nairobi, Ruto sounded out of touch with protesters’ demands. “I am fully in charge, I am stronger, I assure Kenyans that I will have a very effective cabinet to serve Kenyans, I will have a government of national unity. Pray for me, my government is committed to moving Kenya forward.” Those words sound hollow to most people because public trust in the government has disappeared. The young people who backed Ruto over Raila Odinga in the 2022 presidential elections phrase it better. “The President is talking about having a new cabinet when people are asking serious questions on accountability. There’s no word on corruption and misuse of public resources, yet they want us to believe that changing a few faces in government will fix this country,” said Chris Obwar, a 19-year-old graphic design student in Nairobi.
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Founders continue to raise debt as funding decline persists, according to the State of Tech in Africa report
Venture capital funding in Africa’s tech ecosystem continues to decline. Founders only raised $779.7 million in H1 2024, the lowest amount since 2020, according to the latest edition of the State of Tech in Africa (SOTIA) report by TechCabal Insights. Over a quarter of this funding was from non-equity raises; debt deals, and grants, meaning founders continue to reserve more ownership of their companies. The decline in equity deals continues despite startups refocusing on becoming profitable and taking cost-cutting measures including layoffs. “There’s no glossing over some of the difficulties the African tech ecosystem has seen in the period under review as layoffs continued and mega deals were nowhere to be found,” the report said. The number of equity deals halved and the value of the investments reduced by 24%, year on year, according to SOTIA. Across about 233 deals closed in the half of the year, founders secured the most funding from debt deals, about $254 million. However, venture deals remain the most common form of funding, and most of it went to early-stage startups. In 16 rounds pre-seed startups raised about $12.9 million. As seed-stage startups raised $66.2 million in 20 rounds. But the most venture deal funding—$155 million— came from only 4 series-B rounds. The least funding came from grants—$12.7 million. In this persistent decline, most of what has remained the same is the destination of the funds. Investors continue to show confidence in the Big Four. Egypt, South Africa, Nigeria, and Kenya accounted for 65% of the funding. However, that may change soon, as Benin and Ghana raised—$50 million and $18.6 million respectively— more funds than Nigeria and South Africa in Q2 2024. More new developments can be seen in the sector investors favoured in H1 2024. Fintech which got $863 million in H1 of 2023 lost its first place to the logistics and transportation sector which raised over $218 million. The fintech sector got $185 million, followed closely by the energy and water industry, which attracted about $132 million. The telecom, media & entertainment industry was most impacted by the funding crunch, raising only 3.5 million, its lowest since 2021, per the report.
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