Source: Leadership

Tech startups in Nigeria have raised over $415 million in about 40 deals, in the last 10 years, a new report has revealed.

African startups as a whole borrowed a total of $2.1 billion between 2014 and 2023, according to the report titled ‘Debt Financing in Africa’s Innovative Ecosystem’ by Briter Bridges, a research and market intelligence organisation specialising in emerging countries.

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Kenyan startups received the lion’s share of this debt, having borrowed over $800 million in 60 transactions.


The $415 million that the Nigerian entrepreneurs borrowed over the course of 40 deals was the second-highest amount on the continent in the period under review.


Over 75 per cent of the debt investment raised by African entrepreneurs came from the top four countries—Nigeria, Kenya, Egypt, and South Africa.

According to the report, a decrease in equity funding over the past five years has led to an increase in debt financing within the African startup ecosystem. As per the research, debt as a share of the total volume of funding to ventures in Africa increased from four per cent to 26 per cent between 2019 and H1 2023.


It stated that: “While debt is certainly playing a role in Africa’s startup ecosystem and innovations on the financing side making it more accessible, one of the biggest drivers of debt’s rise in Africa’s startup ecosystems may be the dramatic fall in equity funding, which fell from $2.6 billion in 2022 to $1.4 billion in 2023.

“Over the past ten years, more than $2 billion in disclosed debt funding has been raised by digital, technology-enabled, and green companies in Africa from more than 140 funders for a total of more than 200 deals.”


Briter Bridges reports that, in contrast to equity, the majority of loan investment is going to businesses that have collateral, with over 75 per cent of debt funding going to cleantech, mobility, agriculture, and logistics enterprises with a high asset concentration.

It further stated that, although the amount of debt financing given to African entrepreneurs has increased, it has not been dispersed equitably throughout industries.

Traditionally, debt has moved to industries where financing is available as security against assets or other collateral, such as loan books. For instance, fintech and cleantech are the industries where startups have gotten the greatest investment. However, even among these, there are a handful of products driving it.
Cleantech accounted for about half of the announced loan funding between 2014 and H1 2023.

Pay-as-you-go products and solar house kits received the most of the money. Almost 25 per cent of debt capital in fintech has gone toward buy-now-pay-later and asset finance. In mobility, it served for electric vehicles, and within agtech, it was used to finance agriculture equipment.


The $200 million raised by the Kenyan startup Mkopa, the $130 million raised by Sunking, another Kenyan startup, and the $50 million raised by the Nigerian startup Lumos were among the top debt deals during the period covered by the research.

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Source: Leadership