African Startups Feel The Pinch As Funding Crunch Hits

As tech investors take the more cautious route in a subdued market environment, Africa’s startup scene is feeling the pinch of a funding slowdown after years of consistent growth.

The capital crunch has forced tough calls in some cases, triggering strategy tweaks and spending cuts (most commonly in the form of layoffs and pay cuts), as well as the shuttering of some companies and divisions. 

Africa’s tech landscape—an attractive spot for investment from global funders keen to bet on untapped markets in recent years—had proved somewhat resilient in the face of the downturn observed in tech globally over the past year; raising USD 3.6 B in 2022, per WT Data Labs, to keep pace with previous years. However, recent numbers reflect a cool-off.

Funding data drawn from WT Data Labs show a significant dip in investments in the first quarter of the year as African startups raised ~USD 767 M; a 53 percent drop from Q1 2022, which recorded USD 1.63 B.

Deal count also took a hit c...