2024 has come and almost gone, leaving the African startup ecosystem grappling with challenges that were anticipated at the beginning of the year. Writing for Afrikan Heroes back in January, I made bold predictions about the sector’s trajectory — many of which have been realized, for better or worse. With funding nosediving and closures mounting, the year painted a sobering picture of resilience, adaptation, and survival in one of the world’s most promising but volatile markets. This piece revisits those predictions and examines how they played out across the continent.
On Low Funding for Startups: A Tough Financial Terrain
In January, I predicted a significant decline in funding activity for African startups. The closure of 54gene, a genomics research company that once symbolized African innovation, set the tone for the year. Despite raising $45 million in its prime, the company’s downfall foreshadowed the financial turbulence awaiting others in 2024.
Fast forward to today, the numbers speak volumes. According to The Big Deal, a firm tracking startup funding in Africa, investment activity from January to November 2024 dropped by 32% compared to the same period in 2023. Startups secured $1.9 billion during this period, down from $2.8 billion the previous year. Even with TymeBank’s $250 million Series D round announcement, this December, the continent struggled to match last year’s lackluster funding levels. This is a very poor performance, especially considering it is nearly equivalent to what startups in Singapore, a single country (not a continent), raised in 2024.
Notable exceptions included Moniepoint, which raised $110 million in a Series C round, and TymeBank. Yet, these bright spots could not mask the overall funding contraction. For context, 2023 itself was considered a weak year for African startups, making 2024’s decline even more alarming.
The fallout was clear. With reduced access to external capital, startups had to pivot to survival mode, embracing alternative financing strategies like local capital markets, crowdfunding and strategic partnerships. Others focused on creating sustainable revenue streams to weather the economic storm.
On High Startup Shutdowns: The Grim Reality
The grim prediction of increased startup closures in 2024 also materialized. At the start of the year, I flagged the closures of Zazuu, Pivo, and 54gene as harbingers of what lay ahead. By year’s end, this list had expanded significantly, with casualties including:
- Copia Global: The e-commerce company shut down operations, despite its strong early promise.
- Gro Intelligence: The data-driven agricultural platform succumbed to financial difficulties.
- iProcure and Marketforce (Reja Reja): Key players in Kenya’s supply chain space folded under economic pressures.
- ThePeer and MVX Logistics: Despite securing earlier rounds of funding, these startups could not navigate 2024’s financial headwinds.
- SWVL: Egypt’s first unicorn barely clung to life, oscillating between operational pauses and restructuring efforts.
The consequences of these closures extended beyond financial losses. Founders reported mental health challenges, struggling under the weight of failing businesses, regulatory pressures, and disengaged investors. This underlined the importance of financial transparency, good governance, and accountability — qualities many startups neglected at their peril.
On a Difficult Year for Startups: Navigating a Minefield
Beyond funding and closures, African startups faced a slew of challenges in 2024. Inflation surged in key markets like Nigeria and Egypt, eating into consumer purchasing power and operational budgets. Protests swept through Nigeria and Kenya, disrupting business activities. Regulatory hurdles added further complications, with stricter rules in markets such as South Africa.
The absence of mega acquisitions underscored the tough environment. While some startups managed to pivot — either shifting their business models or expanding to new markets — many struggled to adapt. The lessons for the year were clear: resilience, financial discipline, and adaptability were critical for survival.
What Does 2025 Hold in Store?
As 2024 draws to a close, the African startup ecosystem stands at a crossroads. The coming year could bring fresh opportunities for growth and innovation, but it will also demand careful planning and execution. Predictions for 2025 will follow in January, as we evaluate whether the lessons of this turbulent year have been absorbed.
For now, the focus shifts to reflection and preparation. To all players in the ecosystem: may 2025 bring resilience, recovery, and renewed hope. Happy holidays!
