In the midst of a slowdown in the financing of actions in financial technology companies worldwide, the financing of shares in African startups Fintech decreased by 25% in 2024, reaching $ 600 million. This further strengthens the growing popularity of debt financing while investors seek to make safer bets on startups in Africa.
This was disclosed in the Global Fintech report (2024) published by Global Startup Analytics Company, CB Insights. According to him, the finance in shares of $ 600 million attracted by fintech startups across the continent is below $ 800 million in 2023.
Africa’s financial technology space continued to be the most dynamic of the ecosystem last year, representing $ 1.026 billion in funding. This number represents 47% of the $ 2.2 billion attracted by African startups, according to data from the company of African Startup Venture Funding Analytics, Africa is the big deal.
On a positive note, the drop has been the slowest recorded since 2022 when fintech startups have raised $ 1.1 billion. This represented a drop of 35.3% compared to the $ 1.7 billion lifted in 2021.
Although there has been a drop in total equity in recent years, the rate has decreased each year. To note, the African Fintech startups raised $ 800 million in 2023. This represents a significant drop of 27.2% compared to the total 2022.
Aside from financing, space has also experienced a total number of transactions. According to the report, the $ 600 million in 2024 were invested in 91 transactions. This is down compared to the 177 transactions recorded in 2023 and represents a drop of 48.5%.
The total number of agreements experienced a constant drop of 2022 when the total transactions culminated at 278.
The decrease in stock’s financing is a global affair
The financing of shares in African startups has decreased, investors, investors seem to take financing by loan. This happens in the middle of a winter of funding that has had an impact on space.
In fact, 2024 has witnessed the lowest quarter of actions in the first quarter of 2020 while the African finches attracted $ 35 million in the second quarter of last year. This represents the lowest quarter that fintech startups are only attracted $ 22 million at the start of the COVVI-19 pandemic in 2020.
Despite this, the space was able to produce two unicorns. One of them, Moniepointled the pack for the biggest equity offers during the year with its $ 110 million increase in October. La Ronde saw the participation of DPI, Google for startups, capital management, Lightrock and Verod Capital.
The drop in equity investments is a global phenomenon. According to the report, Equity Investments in World Fintech companies underwent a 20% decrease in annual shift, going from $ 41.9 billion in 2023 to 33.7 billion dollars in 2024.
The decline is the smallest in three years, however, because the investment in equities had increased from $ 80.7 billion in 2022 to 41.9 billion dollars in 2023, representing a drop of 48%. Before that, it had increased from $ 143.6 billion in 2021 to 80.7 billion dollars in 2022, representing a drop of 44%.
The number of offers also dropped in 2024 with the total number of offers that plunged 3,580 from 4,331 recorded in 2023. This represents a drop of 17.3%. The decline follows a sequence of declines because the total number of offers also increased from 6,600 to 4,331 representing a drop of 34.4%.
Quarterly, the data show that a rebound is in sight, because the fintech startups have finished the year. The financing of shares increased from $ 7.6 billion in the third quarter to $ 8.5 billion in the fourth, marking an increase of 11.8%.
“”There are signs that the Fintech market stabilizes. The annual drop in funding was the smallest fintech in 3 years. Meanwhile, at the quarterly level, funding has rebounded to close the high year, increasing 11% QOQ to reach $ 8.5 billion in the fourth quarter“Noted the report.
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