Nigeria has lost its coveted crown as the top destination for startup investments to Kenya, according to the latest report ‘Africa: The Big Deal’.
Foreign investments in Nigerian startups declined by 65.83% year-on-year from $1.2 billion in 2022 to $410 million in 2023.
During the same period, Kenya raised $800 million to emerge top destination for investments in Africa while Nigeria dropped to the fourth position in terms of total startup investments.
However, the Big Four African nations, including Kenya, Egypt, South Africa, and Nigeria, continued to dominate the startup funding scene in 2023 and attracted 87% of the total foreign investments on the continent.
The report highlights Nigeria’s pivotal role in this shift, noting that while the country still boasted the highest number of startups raising $100,000 or more (146, constituting 29% of the continent), the total funding amount experienced a drastic threefold decrease year-on-year.
The research firm observed that “Nigeria is the country where the most dramatic change happened in 2023.”
Despite maintaining a high number of startups, the total funding for Nigerian startups plummeted to $410 million, compared to $1.2 billion in 2022 and $1.7 billion in 2021.
Consequently, Nigeria’s share of Western African funding declined to 68%, down from 85% in 2021 and 77% in 2022.
This decline in startup investments emphasizes the changing dynamics of Africa’s tech ecosystem with Kenya emerging as a formidable player in the startup funding arena.
As Nigeria grapples with this setback, stakeholders are left pondering the reasons behind this significant shift and exploring avenues to revitalize the country’s startup investment landscape.