TechCabal Insights reveal Funding for African Tech Startups Plunge by over 45%

The TechCabal Insights has revealed significant challenges and innovative responses from startups amidst a sharp decline in funding in its latest quarterly report.

The report reveals a stark reality as Q1 2024 funding for African startups plunged by over 45%, totalling $466 million.

Despite this downturn, logistics startups emerge as the top earners, securing $151 million in investments.

Notably, fintech, although experiencing a decrease, remains the sector with the most funding deals.”

In response to funding constraints, several startups have opted for strategic pivots to ensure viability.

Tech Cabal Insights report that these pivots range from shifts in business models, such as transitioning from fintech to edtech, to exploring asset-light approaches.

One standout example is KIPPA, which successfully navigated a sector switch, highlighting the adaptability and resilience of African entrepreneurs.

Amidst the challenges, success stories emerge with mobility platform Swvl and neobank TymeBank achieving profitability for the first time.

These milestones are attributed to diligent cost-cutting measures, divestments, and a sharp strategic focus.

Additionally, e-commerce giant Jumia records a notable reduction in operating losses, signalling positive strides toward sustainability.

TechCabal Insights’ Q1 2024 report paints a nuanced picture of Africa’s tech ecosystem, showcasing both the challenges posed by dwindling funding and the resilience and adaptability of startups in the face of adversity.