The number of active start-up investors in Africa declined in 2024, hitting its lowest point since 2021.
Yet, amidst the slowdown, remarkable success stories emerged. Oui Capital secured an $8 million return on a $150,000 investment in Moniepoint. Outside the startup scene, Africa Capital Alliance’s CAPE IV fund achieved a staggering $360 million return on an $80 million investment in Aradel Holdings. Essentially telling the tale of two sides to a coin that where challenges exist, opportunities simultaneously exist.
Data from The Big Deal reveals that approximately 520 investors participated in at least one transaction valued at $100,000 or more in Africa in 2024. This represents a significant drop from the 610 investors recorded in 2023 and a sharp decline from the over 1,000 investors active in 2022.
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A closer analysis of the startup investment landscape further highlights the contraction, with only eight investors involved in 10 or more deals exceeding $100,000 during the year. During the year, African start-ups received about $2.2 billion in funding, marking a 25 percent decline from the $2.9 billion recorded in 2023.
Of this figure, Nigerian startups contributed about $410 million, bolstered by Moniepoint’s $110 million Series C funding and Moove’s $110 million Series B funding round. Essentially, these two firms made up over 50 percent of Nigeria’s total start-up funding of 2024.
In Nigeria, startup funding in 2024 showed modest growth, surpassing the $398 million raised in 2023. However, the year’s highlights extended beyond funding figures. Oui Capital, after achieving an impressive $8 million return on its $150,000 investment in Moniepoint, successfully returned its $4 million Mentor I fund to investors. This marks a rare success in an ecosystem often overshadowed by stories of losses.
A BusinessDay report from 2023 revealed that startup shutdowns in that year alone cost investors approximately $79 million.
The success of Oui Capital in returning the fund highlights some of the successes recorded in the private equity scene. For example, CRE VC exited from Andela and was also able to pay back its first fund.
Away from the startup scene, private equity firms have also posted successes, with a leading example being ACA’s CAPE IV achieving about 350 percent returns on its investment in Aradel Holdings. After listing on the NGX, CAPE VI sold off about $12 million worth of its holding in the oil company.
Established private equity firms have consistently been pillars of success, with notable examples including Helios’ lucrative exits from OVH, GB Foods, FCMB, and ARM Pension Managers. However, the narrative in the startup venture capital space has been less favorable. Only about 5% of VCs that raised funds since 2019 have successfully returned capital to their investors.
Industry sources suggest that among the few venture capital funds that managed to return their capital, a key strategy has been leveraging secondary share sales to navigate the limited revenue-generating potential of many startups.
