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Africa set to see sustained downturn in funding in 2023 • TechCrunch

Africa set to see sustained downturn in funding in 2023 • TechCrunch

Africa set to see sustained downturn in funding in 2023 • TechCrunch

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Africa seemed to defy the drop in global venture capital funding in the first half of 2022 after its startups raised $3 billion, double the amount raised over a similar period the year before. However, the correction in the venture capital market caught up with the continent in the second half of last year, when note sizes fell and fewer deals were completed as investors tightened the strings of the market. stock Exchange.

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Venture capitalists are now predicting that the funding slowdown in Africa will continue into 2023 as investors continue to pull back, making it harder for new and existing startups to raise capital.

“My prediction for 2023 is that things will get worse before they get better – rounds, layoffs, closures and bridges will continue to increase in the African startup ecosystem.” Abel Boreto, Novastar Ventures

“With the global economic downturn continuing through 2023 due to inflationary pressures and tighter monetary policy, investors on the continent will maintain a shrewd approach to investing and African startups will continue to find it difficult to raise money. funds,” said Bruce Nsereko-Lule, General Partner of Seedstars Africa Ventures.

As a ripple effect, the operating environment for startups is expected to deteriorate this year, leading to increased layoffs, reduced activities, rounds and company closures, continuing the trend that accelerated in late 2022 .

Mega-towers are also expected to be rare, as was the case in the last half of 2022 when no deals over $100 million were signed, according to The Big Deal, a deal database. publicly disclosed. Overall, six mega-towers closed last year (all in the first six months), half the number of such deals closed in 2021, when VCs invested record amounts.

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