The African Private Capital Association has revealed that the African continent secured $3.6bn in venture capital funding, including $1bn from venture debt, in 2024.

This was indicated in the statement accompanying the release of the 2024 Venture Capital in Africa Report.

This report, which is in its sixth edition, revealed that Africa experienced a market correction a year after global markets, with the continent reaching its funding low in H1 2024—highlighting the delayed but pronounced impact on dealmaking during a period of inflation, supply chain disruptions and geopolitical shocks.

The report found that “2024 was a challenging year for African startups, noting a 22 per cent year-over-year decline in deal value and a 28 per cent drop in deal volume. While global venture capital value rose six per cent and volume fell 24 per cent, Africa’s sharper contractions reflect the continent’s delayed downturn cycle.

“Venture debt lenders comprised only 12 per cent of deal volume yet generated 37 per cent of VC deal value in 2024. The three per cent YoY increase in deal value and volume signals continued investor appetite for the asset class.”

On geographic distribution, West Africa maintained its lead as the most active region for the fourth consecutive year, accounting for 23 per cent of total deal volume, with Nigeria leading at 16 per cent. The ‘Big 4’ markets (Nigeria, Egypt, Kenya, and South Africa) represented 55 per cent of volume and 64 per cent of value.

The financial technology sector remained dominant as it cornered 116 deals, raising $1.4bn (34 per cent of all tech-enabled rounds). Clean & ClimateTech rose to 13 per cent of tech-enabled deal volume, up from a seven per cent five-year average, while AI made its first appearance among the top four most funded verticals with 42 deals raising $108m.

Significantly, African investors emerged as the single largest group of active participants in VC, representing 31 per cent of the total investor pool compared to 19 per cent a decade ago. This underscores the momentum in domestic capital formation despite overall investor participation declining 21 per cent from 2023 to 614 active investors.

The fundraising environment showed remarkable resilience, with eight funds closing at $736m in 2024 alone, a 41 per cent year-on-year increase that underscores the positive, long-term growth of Africa’s VC ecosystem despite global headwinds. Since 2015, 35 fund managers across 41 funds have raised $2.7bn in final closes, reflecting a 25 per cent CAGR.

The exit landscape is gaining momentum, with 138 exits recorded between 2019 and 2024, reflecting a clear upward trend over time, despite remaining flat in 2024 with 26 exits recorded. Trade sales continued to dominate that year, accounting for 84 per cent of all exits with an average holding period of 3.8 years.

Chief Executive Officer of AVCA, Abi Mustapha-Maduakor, commenting on the report, said, “The data demonstrates how Africa’s venture ecosystem is responding to global challenges with notable resilience. While overall funding has contracted, we’re seeing strategic adaptations, higher-quality deals, sector diversification beyond fintech, increased venture debt utilisation, and the strengthening role of African investors.

“These responses reflect a maturing market that continues to present compelling opportunities. We remain optimistic about the venture landscape in Africa, particularly as it offers investors unique exposure to fast-growing markets with demographic advantages and innovation potential compared to more traditional investment destinations.”

AVCA is a community of capital allocators, investors, fund managers, advisors, entrepreneurs, and professionals committed to our shared vision of a prosperous Africa that is sustainable, inclusive, and innovative.