Overview
So What is a Start-Up?
When it comes to definitions of what a start-up actually is there is a heap of different opinions in the market. However it is useful to pin down a specific definition that is meaningful. Mostly it matters because it should determine what a business should be focussing on at a particular phase in their growth. Most critically of all, it is key for those start-ups seeking funding to have a clear definition presented to possible funders. often terms such as start-up and scale -up are used interchangeably, however this is not correct.
Some not so useful defining tools for determining what a start-up is, are things such as staff size, length of existence, if the company is a tech related company or if they are innovators or “market disruptors”. Those things may indicate some aspects of a business but are not useful in determining phase of development.
The clearest definition of a start-up is that it is a company that is built to grow rapidly. For this reason Tech-companies frequently fall into this category as tech is easy to scale. However it is not limited to tech companies and even modern manufacturing or logistics companies can scale rapidly with the use of robotics or improved processes compared to existing companies.
Defining Start-Up Phases
Founding Phase: This is a critical market fit stage where companies need to establish if their product or service will get any traction in the marketplace. Is there a good market fit for their product and determining how big the potential or demand is likely to be. This stage is also characterised mostly with what is termed pre-seed funding that is often capital raised from close associates or family or self funded
Start-up Phase: This is a critical step as the future development of the company will hinge on getting enough revenue or funding to ensure the business can be rolled out and scaled further. There may also be further product improvement or refining in this stage. this stage will also see if there is any traction for investors with Seed funding that would include Venture Capital groups focussed on early stage investments as well as angel investors and possibly public funding via funding platforms.
Business Break-Out Phase: This phase of a start-up business is all about creating revenue growth and building market share. The end goal would be to create a viable valuation for the company in order to make it attractive for Series A, B and C funding from bigger institutions or corporates, in order to build a bigger revenue or order book with models such as recurring revenue such as subscriptions being more attractive for investors.
Scale-up Phase: This is all about growth with profitability the key goal, moving beyond simply a revenue focus. during this stage there is potential for acquisitions and new product development as well as a view to either head towards an initial public offering (listing on a stock exchange), or for a buyout by a bigger entity.
How big are Start-up’s by Phase in Africa:
The African startup ecosystem raised approximately $2.4 billion in 2023 and $3.2 billion in 2024 (equity and debt combined), with Fintech dominating at 60% of equity funding in 2024.
The “Big Four” countries—Nigeria, Kenya, South Africa, and Egypt, dominate the start-up landscape and accounted for 83–84% of funding in Q1 of 2025 with fairly similar proportions in prior years.
Funding data for 2025 is partial, covering January–May, with $1.055 billion raised. Below is the breakdown of average funding amounts by stage and category, based on available data from 2023–2025.
Average Funding by Stage and Category in Africa (in USD)
Pre-Seed Funding
- Tech Startups: Limited specific data, but pre-seed rounds in 2024 averaged ~$0.5M across sectors, with Tech (e.g., AI, logistics) likely similar due to high deal volume (9% of total funding in H1 2024). Example: Waribei (Fintech, Ivory Coast) raised $0.82M in 2024.
- Biotech Startups: Sparse data; pre-seed rounds are rare but estimated at ~$0.5M–$1M. PBR Life Sciences (Nigeria) raised $1M in 2024 for healthcare data analytics, suggesting Biotech aligns with this range.
- Fintech Startups: Average ~$0.5M–$0.8M in 2024, consistent with broader pre-seed trends. Fintech pre-seed deals are numerous but small, reflecting early-stage investor interest.
- Other Startups (e.g., Agritech, Cleantech): ~$0.5M, with examples like climate tech startups raising similar amounts (e.g., Morocco’s Sand to Green, $50K grant, but equity deals align with $0.5M).
- Overall Average: ~$0.5M (H1 2024: $13M across pre-seed deals, ~2% of total funding).
Seed Funding
- Tech Startups: Average ~$1.6M in 2024, up 26% from 2023. Tech startups (e.g., AI, logistics) contributed significantly to the 69% deal volume in Fintech-heavy 2024.
- Biotech Startups: Limited data; estimated ~$1M–$2M. Example: South Africa’s African Biologics raised $6.2M (grant, 2025), but equity seed rounds are smaller, aligning with general trends.
- Fintech Startups: Average $1.6M in 2024 (up 26% from 2023). Fintech seed deals comprised 22% of equity funding, with 315 deals in 2024. Example: Sahl (Egypt) raised $6M in a combined seed/Series A round.
- Other Startups: ~$1.5M–$1.6M, with Agritech and Cleantech seed rounds (e.g., SunCulture, Kenya, $27.5M in 2024) pulling higher averages but aligning with Fintech.
- Overall Average: $1.6M (2024: $58.8M across seed rounds, 9% of total funding; 2023: $167.9M across 95 deals).
Series A Funding
- Tech Startups (e.g., SaaS, AI): Average ~$8M in 2023, dropping to ~$6.7M in 2024 (18% decline). Example: Peach Payments (South Africa, Fintech-focused but tech-enabled) raised $34M in 2023.
- Biotech Startups: Scarce data; estimated ~$5M–$10M, as Biotech is less common. Health tech startups (e.g., digital health platforms) raised ~$48M across Series A in Q1 2024, suggesting similar averages.
- Fintech Startups: Average $8.7M in 2023, down from $15M in 2022, and ~$6.7M in 2024 (13% deal increase but 18% ticket size drop). Example: Valu (Egypt) raised $18.7M in 2024.
- Other Startups: ~$6M–$8M, with Agritech (e.g., Pula, Kenya, $20M in 2024) and Cleantech showing comparable averages.
- Overall Average: $6.7M (2024: $52.6M across Series A, 8.1% of total funding; 2023: $418.6M across 34 Series A/B deals).
Series B Funding
- Tech Startups: Average ~$20M in 2024, down 27% from 2023. Example: Sabi (Nigeria, e-commerce) raised $38M in 2023.
- Biotech Startups: Limited data; estimated ~$15M–$25M, as Biotech Series B is rare. Health tech deals (e.g., Afrigen Biologics) suggest alignment with Tech averages.
- Fintech Startups: Average ~$20M in 2024, with major deals like Moove (Nigeria, $100M, 2024) skewing higher. Fintech dominates, with 60% of equity funding.
- Other Startups: ~$15M–$20M, with Cleantech (e.g., Husk Power Systems, $103M Series D but Series B estimated lower) and Agritech showing similar ranges.
- Overall Average: $20M (2024: $135M across Series B, 20.7% of total funding; 2023: $418.6M across 34 Series A/B deals).
Series C Funding
- Tech Startups: Average ~$50M–$70M, with limited Tech-specific deals. Fintech-heavy deals dominate this stage.
- Biotech Startups: Sparse data; estimated ~$40M–$60M. Example: Biotech-adjacent health tech startups raised significant late-stage rounds, but specific Series C data is lacking.
- Fintech Startups: Average ~$77M in 2023, with examples like TymeBank (South Africa, $77.8M, 2023) and Moniepoint (Nigeria, $110M, 2024, Series B/C overlap). 2024 saw megadeals boosting averages.
- Other Startups: ~$50M, with Cleantech (e.g., Husk Power Systems, $103M Series D, 2023) indicating Series C ranges. Agritech also aligns.
- Overall Average: $70M (2023: $77.8M for TymeBank; 2024 megadeals like Moniepoint’s $110M suggest higher averages).
Notes
- Data Limitations: Biotech and non-Fintech Tech data is sparse due to Fintech’s dominance (60% of 2024 equity funding). Estimates for Biotech and Other are derived from health tech, Cleantech, and Agritech trends where applicable.
- Sources: Data is aggregated from Techpoint Africa, Partech, TechCrunch, and Disrupt Africa, covering 2023–2025 (up to May 2025). Funding amounts are in USD, converted at historic spot rates where applicable.
- Trends: Fintech led with $1.3B in 2024 (60% of equity funding), followed by Cleantech (~$800M, 2023). Biotech and Tech (AI, logistics) are growing but represent smaller shares. Series A and B deal sizes dropped in 2024 (–18% and –27%, respectively), while seed deal sizes grew (+26%). Only 5% of seed-stage startups reach Series A, reflecting a tough funding environment.
- Geographic Focus: Nigeria, Kenya, South Africa, and Egypt dominate, with 84% of funding in Jan–May 2025. Francophone Africa (e.g., Senegal, Ivory Coast) is rising but smaller.
