Turbulence and Triumph: Reflecting on Africa’s Tech Rollercoaster in 2023

2023 was a turbulent year for African tech: funding slowdown, startup closures, but also cleantech rise and crypto resurgence in Nigeria. 2024 predictions include increased DFI participation, continued cleantech momentum, and stricter regulations. Collaboration, new tech hubs, and resilience are key for the future.

Fiona Maingi 🇰🇪
February 19, 2024

In the rearview mirror of 2023, Africa’s tech ecosystem emerges as a testament to resilience, adaptation, and the perpetual evolution intrinsic to the industry. As we embark on this retrospective journey, we unravel the intricacies of a tumultuous year, exploring the highs and lows that shaped the narrative of African startups. Additionally, we set our sights on the horizon, offering insights and predictions for what lies ahead in 2024.

Venture Funding Roller coster

The year kicked off with a stark reality check as the global venture funding market witnessed a dramatic downturn, plunging by approximately half in the first half of 2023. This abrupt shift correlated with interest rate hikes, exerting a chilling effect on fundraising activities globally. Africa, which had basked in the glow of a thriving venture scene in 2022, found itself navigating the challenges of a funding winter.

In H1 2023, startup funding in Africa contracted to just over $1billion, a significant drop from the robust $3.5 billion recorded the previous year. The region experienced a 40% reduction in both deal volume and funding compared to the preceding year as stated in the annual Africa report by Partech. However, a commendable resurgence in Q3 saw funding jump by 28%, injecting optimism into the ecosystem. Despite the recovery, the overall slowdown prompted a recalibration of priorities, with investor focus shifting towards nurturing early-stage startups and mature players approaching unicorn status. The final tally for Africa’s venture capital industry as of Q3 2023 stood at 2.95 billion, a notable decline from the $4.3 billion raised by the same point in the previous year. Noteworthy, Development Finance Institutions (DFIs) stepped in as crucial players, providing financial lifeline for startups.

Photo credit: Dabafinance


Startup Shakeups

The funding slowdown reverbarated across the startup landscape, resulting in a wave of closures, pivots, and downsizing. According to Dabafinance, at least 15 African startups, once lauded for their potential, shut their doors, collectivley having raised over $200 million in disclosed VC funding. Among them were names like 54 Gene, Dash, Sendy and WhereIsMyTransport.

Copia, MarketForce and Twiga Foods were among those forced to adapt their operations, emphasizing the necessity for resilience and strategic adjustments. The challenges faced by well-funded ventures pursuing growth-at-all-costs strategies underscored the importance of sustainable business models and strategic planning.

Cleantech’s Ascent

Amidst the tumult, a surprising trend emerged-the ascent of climate-tech/ cleantech. Growing 3.5 times to over $860 million, cleantech secured its place as Africa’s seconf most funded sector after fintech. As of Q3. cleantech accounted for an impressive 32% of total VC funding, closely trailing Fintechs 35%. This shift signifies a growing awareness and commitment to sustainability, with innovations in agriculture, clean energy, sustainable materials, environmental sustainaility, e-mobility, and nature-based solutions taking center stage.

The sector’s rise suggests a paradigm shift in investor preferences, aligning their capital with businesses addressing pressing environmental challenges.

Crypto Resurgence in Nigeria

In Nigeria, the crypto scene experienced a remarkable revival following the Central Bank’s decision to lift the ban on cryptocurrency. This groundbreaking move, nearly three years after the ban, reopened the doors for local startups, allowing them to innovate and expand in the dynamic fintech landscape.

In Other News…

2023 was definitely not without its challenges. Dash, a Ghanaian fintech made headlines for the wrong reasons. Despite raising approximately $86 million in multiple quick-fire raises, Dash collapsed a year later due to mismanagement, misappropriation of funds, and a culture of profligacy allegedly orchestrated by its founder. This incident then begs the question;

Are African Founders eqipped with the strategic acumen necessary to navigate the complexities of business expansion?”

On a lighter note, Founders Factory Africa secured an additional $114 million from Masteracard Foundation and Johnson & Johnson in August, signalling confidence in the model to scale disruptive tech startups across the continent. Peter Njonjo, CEO of Twiga Foods, took a sabbatical, reflecting the toll of a turbulent period marked by layoffs and restructuring efforts.


The 2023 chapter on Africa’s tech landscape stands as a dynamic tapestry of challenges and triumphs. The year tested the mettle of startups, reshaped investor priorities, and witnessed the rise of sectors addressing global challenges. As we sett our gaze on 2024, several trends and predictions come to the forefront.

2024 Predictions?
  • Resurgence of confidence: Despite the challenges of 2023, we predict resurgence of confidence in the African tech ecosystem. Lessons learned from funding downturn and startup closures will foster a more strategic and sustainable approach to growth.
  • Increased DFI participation: Development Finance Institutions will contine to play a pivotal role in supporting tech startups, bridging funding gaps and fostering innovation. The partnership between DFIs and startups is likely to strengthen, providing a stabilizing force in unpredictable market conditions.
  • Continued Cleantech Momentum: The momentum gained by cleantech in 2023 is expected to persist, with investors increasingly prioritising sustainable solutions. Cleantech startups addressing environmental challenges will likely attract significant funding, contriuting to the sector’s growth.
  • Rise of collaborative initiatives: Inresponse to challenges faced by startups in 2023, collaborative initiatives and partnerships will gain prominence. Incubators, accelerators, and collaborative ecosystems will provide valuable support and resources to emerging startups.
  • Tech Regulation and Governance: The fall of Dash and the subsequent calls for accountability highlight the importance of  robust governance and regulation. We anticipate increased scrutiny and regulatory measures to ensure transparency and accountability in the tech sector.
  • Emergence of New Tech Hubs: As the ecosystem evolves, new tech hubs and innovation centers may emerge, providing fertile ground for the next generation of startups. Governments, investors, and industry players will likely collaborate to create conducive environments for innovation

As we navigate the uncertainties of 2024, it’s crucial for the African tech community to champion resilience, adaptability, and sustainable growth. Collaboration among entrepreneurs, investors, and policymakers is key to fostering innovation and addressing societal challenges.

How do you envision shaping the future of African tech in 2024?

Don’t forget to follow us on our social media platforms and stay updated on our latest episodes across various platforms to gain deeper insights into the tech landscape in Africa. Explore our My Tech Story Africa blog for the latest trends in tech across the continent.

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