Africa’s tech ecosystem is thriving, with various trends shaping its future. Here’s an overview of the current state of African tech and emerging trends:

Funding Trends

African startups saw a 22.73% decline in total funding from 2023, reaching $2.21 billion across 488 deals in 2024. However, the second half of the year saw a resurgence, driven by mega rounds from Moniepoint and TymeBank. Fintech remains the leading sector, securing $1.04 billion in funding.

Key Sectors

• Fintech: Dominates the African tech landscape, with digital banking solutions, payment infrastructure, and credit services driving growth.
• Logistics and Transport: Attracts investor interest in solving Africa’s supply chain inefficiencies.
• Climate Tech and AI: Struggle to attract substantial capital, indicating an opportunity gap in sectors that could drive long-term innovation.

Mergers and Acquisitions

Africa’s startup ecosystem witnessed a 34% year-over-year increase in mergers and acquisitions (M&As) in 2024, driven by funding constraints and the need for market consolidation. Notable deals include the Wasoko and MaxAB merger, creating Africa’s largest B2B e-commerce platform.

Expansions

African startups pursued aggressive expansion strategies in 2024, entering 38 new markets. Nigeria led the charge, accounting for 47% of all expansions, while Kenya solidified its position as a preferred expansion hub.

Regulatory Shifts

• AI Governance: The African Union launched a Continental AI Strategy, while South Africa, Nigeria, and Kenya introduced national AI policy frameworks.
• Fintech Regulation: Stricter oversight, particularly in Nigeria and Uganda, with increased compliance costs.
• Crypto Regulation: Mixed signals, with South Africa granting 63 crypto business licenses and Zimbabwe announcing plans for a national regulatory framework.

Unicorns and Profitability

Two new unicorns emerged in 2024: Moniepoint and TymeBank. Moniepoint processed 5.2 billion transactions, while TymeBank achieved profitability for the first time.

Outlook for 2025

• Strategic Consolidation: Increased M&A activity as companies seek operational efficiencies.
• Climate Tech Investments: Expected to rise, particularly in renewable energy and agri-tech.
• Regulatory Scrutiny: Intensify in fintech and AI, requiring startups to engage proactively with policymakers.

Venture Capital Ecosystem

The African VC landscape remains resilient, with a slight decline in equity deal counts and stable funding amounts. Key trends include ¹ ²:

• Increased Participation: Local investors are participating more, with a growing spirit of collaboration.
• Megadeals: Grew in both deal counts and amounts, with 4 equity megadeals in 2024.
• Debt Funding: Decreased by 17% YoY, with increasing pressure on local currencies leading to higher repayment burdens.

Conclusion

Africa’s tech ecosystem is poised for long-term resilience, with profitability, regulatory alignment, and strategic partnerships emerging as key success factors. As the continent navigates funding challenges and regulatory shifts, startups will need to adapt and innovate to thrive