What's Hot

    Gameball raises USD 3.5 million in funding

    February 8, 2023

    Tawseel secures investment from Numu Capital

    February 7, 2023

    Google launches Women Founders Africa Program

    February 6, 2023
    Gulf Africa ReviewGulf Africa Review
    • Industry
    • Infrastructure
      1. Airport
      2. Hospitality
      3. Ports
      4. Power
      5. Rail
      6. Roads
      7. Transport
      Featured

      Osun seeks to capitalise on infrastructure momentum

      Infrastructure May 21, 2018
      Recent

      KarmSolar receives USD 3 million to develop Farafra Solar Grid

      January 11, 2023

      AD Ports Group reports strong growth

      January 3, 2023

      Hyosung Heavy Industries to start construction on South African energy storage project

      December 12, 2022
    • Business & Trade
      1. Agri-Business
      2. Entrepreneurship
      3. FDI
      4. Legislative
      5. MEA
      6. Telecoms
      7. Properties
      Featured

      Analysts predict bullish future for Nigeria’s REITs market

      Business Business & Trade January 21, 2018
      Recent

      Free trade: Qatar and Morocco conclude second round of talks

      January 31, 2023

      Gold-for-oil: Ghana attempts to address forex pressures

      January 18, 2023

      AD Ports Group reports strong growth

      January 3, 2023
    • Finance
      1. Banking
      2. Islamic finance
      Featured

      Social investment platform InvestSky raises USD 3.4 million

      Business Entrepreneurship Finance January 12, 2023
      Recent

      Social investment platform InvestSky raises USD 3.4 million

      January 12, 2023

      African startups face challenges in 2023

      January 10, 2023

      MENA startups raised USD 125 million in December

      January 6, 2023
    • Innovation
    Gulf Africa ReviewGulf Africa Review
    Finance

    African startups face challenges in 2023

    January 10, 20232 Mins Read
    Facebook Twitter Pinterest LinkedIn Tumblr Email
    African Startups
    African startups face a challenging 2023.
    Share
    Facebook Twitter LinkedIn Pinterest Email

    African startups face a range of challenges as the global tech industry endures an ongoing slump and the funding pool is reduced.

    African startups, despite enjoying a record year in terms of funding in 2022, face a range of challenges in 2023 as an ongoing downturn in the tech industry sees the investment pool shrink, according to reporting by Bloomberg.

    African startups: Trouble ahead

    2023 saw African startups raise a record USD 5.3 billion, a rise of approximately USD 100,000 from 2021. The number of deals rose by 20% to 964, according to market intelligence company Briter Bridges. “There are some red flags in that the mega-deals are largely driven by overseas, non-African-committed investors,” said Dario Giuliani, director at Briter Bridges. “There is a risk that the pool for growth funding may be limited in 2023.”

    Global funds including  Sequoia Capital and Tiger Global have led the largest investments in African startups over the past few years. However, as much of the West faces a recession and technology companies around the world are laying off staff, private equity and venture capital firms may avoid making large investments.

    Sonneborn: High profile downrounds ahead

    According to William Sonneborn, International Finance Corp’s global director of disruptive technology and funds, the valuations of tech firms are depressed. “Private businesses aren’t immune from how listed comparables are valued. I expect several high-profile downrounds on the continent this year.”

    Healthtech, climate and farming tech to rise

    Over 33% of African startup funding was directed to fintechs in 2022, however, Sonneborn claims that healthtech, climate and farming technology will attract funds this year. 

    Challenges to “the big four”

    Egypt, Nigeria, South Africa and Kenya continue to attract the vast majority of funding. This is largely put down to their large markets, the support for the startup sector through accelerators, and their more developed economies. However, according to Giuliani, all four are facing economic challenges ranging from slowing growth to currency depreciation. As a result, financing may be impacted. The Egyptian pound sits at a record low while the Nigerian economy is struggling to address rising debt and its currency is weakening. Ghana and Kenya have also seen their currencies depreciate.

    “While in 2021, companies were encouraged to grow at all costs, they now are focused on preserving cash, reducing burn and delaying their next round as long as possible,” Sonneborn said.

    Africa
    Share. Facebook Twitter Pinterest LinkedIn Tumblr Telegram Email
    Previous ArticleMillesima Technologies raises USD 480,000
    Next Article KarmSolar receives USD 3 million to develop Farafra Solar Grid

    Related Posts

    Business Innovation

    Gameball raises USD 3.5 million in funding

    February 8, 2023
    Business Startups

    Tawseel secures investment from Numu Capital

    February 7, 2023
    Business Innovation

    Google launches Women Founders Africa Program

    February 6, 2023
    View 1 Comment

    1 Comment

    1. Pingback: African startups double debt financing

    Leave A Reply Cancel Reply

    LATEST STORIES

    Gameball raises USD 3.5 million in funding

    February 8, 2023

    Tawseel secures investment from Numu Capital

    February 7, 2023

    Google launches Women Founders Africa Program

    February 6, 2023

    Zurich Innovation Championship goes live

    February 3, 2023

    MNT-Halan valued at USD 1 billion

    February 2, 2023
    • Business
      • Agri-Business
      • Entrepreneurship
      • FDI
      • Legislative
      • MEA
      • Properties
      • Telecoms
    • Infrastructure
      • Airport
      • Hospitality
      • Ports
      • Power
      • Rail
      • Roads
      • Transport
    • Finance
      • Banking
      • Islamic finance
    • Commodities
      • Agri commodities
      • Metals & minerals
      • Precious metals
    • Culture & Society
      • Education
      • Energy
    GAR logo
    © GulfAfricaReview.com 2014-2022, All Rights Reserved.

    Gulf Africa Review is a trade news and future networking platform for businesses leaders and trade organisations, established to first inform and secondly assist in facilitating the ongoing business and trade relations between the Gulf Cooperation Council countries and Sub-Saharan Africa. We aim to provide an apolitical voice for this channel of economic activity in a way that benefits both geographies by improving the availability of information about market events, developments and opportunities, while publicising the successes achieved by this ever-broadening regional relationship.

      Subscribe to our newsletter

      Type above and press Enter to search. Press Esc to cancel.