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Browsing: Debt financing in Africa
- Financing by Venture Capital Firms (VC) is the leading source for injecting capital into startups, accounting for 29 percent of the deals.
- Findings show that venture debt is becoming a crucial funding tool, especially for climate tech startups with limited access to traditional equity financing.
- The survey notes that to support this growth, investments in digital and energy infrastructure are essential.
Kenya is emerging as a leader in sourcing capital for its agricultural technology and food startups across the African continent. A large portion of capital for African startups still comes from foreign countries, with approximately 60 per cent, coming from international sources, primarily the United States and the United Kingdom.
On the continent, however, most investors are concentrated in Kenya, Nigeria, and South Africa, where innovation and funding activity are most prominent. Large-scale investments in solar energy solutions and precision agriculture partly drive Kenya’s dominance in the sector.
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- Startups in Africa have attracted over $1.2 billion in financing this year.
- Experts note that debt financing for startups in Africa is increasingly taking centre stage.
- In July, startups d.light, Va1U, Terrapay as well as Cartona all settled on debt financing to boost operations.
Startups in Africa have defied the odds in declining global capital flow, attracting a record $420 million in financing in July. This funding, which excludes exits, takes to $1.2 billion the amount of money channeled to startups in Africa this year and is the highest on record in 14 months.
“The numbers were heavily skewed by the two mega deals that were announced during the month: d.light’s $176 million securitisation facility and MNT-Halan’s $157.5 million raise. NALA’s $40 million Series A also deserves a mention. Combined, these three deals represent 90 percent of the funding raised,” an update by startup funding tracker, Africa: The Big Deal…