TLDR:
Key Points:
- Venture capital investments in Africa decreased by 23% in 2023, totaling $3.6 billion.
- North Africa accounted for 19% of the total transactions, with 104 venture capital deals valued at $532 million.
In 2023, venture capital investments in Africa experienced a significant decline, dropping by 23% to $3.6 billion. The total number of transactions also decreased to 603 from 854 in the previous year, according to a report by the African Venture Capital Association (AVCA). The global downturn in venture capital performance was attributed to consecutive increases in interest and inflation rates, leading to a decline in investments globally.
Despite varying regional conditions, no area was left unaffected by the overall decline, with North America, Asia, and Europe all witnessing significant reductions in investments. Seed funding remained predominant in Africa, representing 37% of all transactions, while large-scale deals constituted only 1-2% of global venture capital transactions. The financial sector topped the list of sectors attracting investments, followed closely by the information technology sector.
Investor focus in Africa is shifting towards sustainable development initiatives and projects aimed at mitigating climate change. Additionally, there is a growing interest in artificial intelligence in the African market, although it still lags behind more technologically advanced economies.
