Funding for African fintech startups saw a sharp increase in the third quarter of 2024 despite the global downward trend, with fintech companies on the continent raising $268 million. This is a significant increase from the $34 million investment in the sector in the second quarter, representing a staggering increase of 688 percent.
The third quarter total also represents growth of 104.5 percent compared to the first quarter of the year, when the continent’s fintech companies raised $131 million. This makes this quarter the best performing quarter of the year, easily eclipsing the figures from previous quarters combined.
Indeed, the third quarter of 2024 is the best performing quarter in over a year, with the highest previously recorded in the first quarter of 2023, when African fintech startups raised $412 million. The continent’s fintech space has not seen a better quarter in the 5 quarters since.
While the continent may have recorded impressive growth in the just-concluded quarter, the feat seems less impressive when you consider the fact that this impressive growth is mainly due to a startup that contributed more half of the total.
That startup is MNT-Halan, an Egyptian company that raised $158 million in a Series E funding round in July. MNT-Halan’s increase means the startup alone contributed 58.7 percent of the African total.
Besides the Egyptian fintech giant, other African startups that have raised $2 million and above include Kenyan company Nala, which raised $40 million in a Series A round in July, this which represents 14.9% of Africa’s total pool. There’s also Paymob, another Egyptian startup that raised $22 million in September, or 8.2 percent of the total.
dopay, another Egyptian startup, raised $14 million in July, or 5% of the quarterly total. Seychelles’ Yellow Network raised $10 million in September, or 3.7 percent of the total, while South African company Omnisient raised $8 million, or 2.8 percent.
Egyptian fintech Lucky and Seychellois startup Thalex both raised $3 million each, or 1.1 percent each. Happy Pay from South Africa, SETTLE and Synapse Analytics from Egypt all raised $3 million each, representing a contribution of 0.7 percent each.
Increase in fintech funding in Africa comes amid global slowdown
This comes even as investment in the global fintech sector has suffered a considerable decline, with fintech companies around the world raising $7.3 billion. This represents a quarterly decline of 25 percent from the $9.7 billion raised in the previous quarter, according to statistics from CB Previews.
The overall third quarter amount ($7.3 billion) also represents a decrease of nearly 4 percent from the $7.6 billion raised in the first quarter of the year. This essentially makes the third quarter of 2024 the slowest quarter of the year. This figure also means that the sector only contributed 13.3% of total tech startup funding for the quarter ($54.7 billion).
This also means that, despite their impressive numbers, African startups only accounted for 3.7% of total investment in space globally.
“Although funding fell on a quarter-over-quarter (QoQ) basis, the drop was not as bad as it might seem. The previous quarter’s level was supported by $1.3 billion in funding to Stripe and AlphaSense. Without these cycles, the decline from Q2’24 to Q3’24 would have been 13 percent.“, indicates the CB Insights report.
The global decline in fintech funding follows an overall decline in the global tech startup sector. The $54.7 billion raised between July and September 2024 is a far cry from the $68.1 billion raised by startups worldwide in the previous quarter (Q2 2024), representing a significant drop of 19.7 %. This is also well below the $62 billion in investment attracted in the first quarter of the year, representing a decline of 11.8 percent.
Total global startup funding attracted in the third quarter is also the lowest funding figure recorded since 2020, falling below the $54.9 billion recorded in the fourth quarter of 2023, which was the previous lowest. Even during the 2020 pandemic, the global ecosystem did not see such a decline as seen recently, with funding figures falling from $61.5 billion in Q2 2020 to a peak at $97.5 billion. dollars in the last quarter of this year.
See also: Global Tech Startups Raised $54.7 Billion in Q3 2024, Lowest Quarterly Funding Since 2020 – Report