In 2024, 87.2% of Francophone Africa startup deals were equity-based

Key takeaways:

  • 87.2% of startup deal value in Francophone Africa in 2024 came from equity funding.
  • Debt financing made up only 12.4% of the total startup capital raised, showing its limited role.
  • Grants accounted for just 0.4%, reflecting minimal non-dilutive support for startups.
  • Startups are more likely to trade ownership than take on debt or apply for grants.
  • The funding landscape remains investor-driven, with equity seen as the path to scale.
  • The near absence of grant funding may hinder innovation for startups that need early runway but aren't ready to give up equity.

In 2024, 87.2% of startup deals in Francophone Africa were equity-based, totalling $55.82 million in value. This preference for equity financing (common for most startup funding activities worldwide) reiterates investors’ appetite for ownership and long-term commitment to ventures, signalling confidence in the scalability and future returns of these startups. Debt financing, while present, accounted for just 12.4% of deals ($7.94M), and grants were almost negligible at 0.4% ($0.25M), suggesting that most founders are raising funds by trading equity rather than relying on loans or free capital.
This dominance of equity-backed deals paints a picture of a startup ecosystem still heavily reliant on venture capital and angel investment, rather than institutional credit or government-led innovation support. In more developed markets, there's often a healthier mix of equity, debt, and grants, indicating more mature financial ecosystems and risk-sharing structures. But in Francophone Africa, startups seem to be navigating limited funding options by leaning into the type of capital that most aligns with risk-tolerant investors.

Source:

Intelpoint

Period:

2024
HTML code to embed chart
Want a bespoke report?
Reach out
Click to copy HTML embed code
Tags
Related Insights
Mobility startups recorded the highest startup funds in Francophone Africa in 2024, raising $20.50M with just two deals
  • Mobility led 2024’s startup funding in Francophone Africa with two deals at a value of $20.5M.
  • Fintech had the highest number of deals at 7, but with a lower total value than Mobility.
  • Cloud Services, Communications, and eCommerce each attracted over $3M from just one deal.
  • Agritech recorded the lowest funding at only $0.2M, despite being a vital sector.
  • Logistics, Healthtech, and HR/Payroll sectors saw two deals each, but with moderate funding.
  • Electric Motorcycle and Eyewear startups each secured $2M–$3M in one-off deals, showing niche interest.
  • Digital Health drew limited attention in both deal count and funding, signalling untapped or underdeveloped potential.
61.76% of financial sector deal volume in Francophone Africa was recorded between 2020–2024 H1, up from 22.06% in 2012–2015
  • Between 2020–2024 H1, 40.58% and 50.91% of deal volume went to consumer staples and consumer discretionary respectively, showing that everyday goods and lifestyle products are fast becoming investment magnets.
  • The utilities sector deal volume exploded in recent years, jumping from 21.62% in 2016–2019 to 70.27% in 2020–2024 H1, an indication that basic infrastructure services like energy, water, and power are now central to investment strategies.
  • 78.57% of all deal volume in the information technology sector happened in the most recent period, suggesting that digital solutions and tech platforms are increasingly being backed by private capital.
  • The industrials sector also bounced back, with 46% of its deal volume coming in the 2020–2024 period.
  • Energy sector investment dropped from 66.67% to 33.33%, and real estate recorded no new deals after 2015.
  • Health care remained consistent across all three periods, securing exactly 33.33% of the deal volume each time, highlighting its stability, even if not standout growth.
Francophone African companies attracted $1.8 billion in private capital in 2021, the highest amount in the past 12 years
  • Francophone Africa attracted $1.8 billion in private capital in 2021, about 9x the previous year (2020).
  • That same year saw 34 deals, which is quite high when compared to some other years, indicating strong investor confidence.
  • In 2024, deal value amounted to just $0.1 billion, and deal volume to 19, pointing to a significant cooling in activity.
  • Between 2012 and 2015, the region saw low deal values, with both 2014 and 2015 recording just $0.01 billion in investments.
  • A notable spike occurred in 2017 with $0.7 billion invested across 17 deals, marking the first major surge before 2021's breakout.
  • Deal counts haven’t always aligned with capital volume. For instance, 2023 had 42 deals but only $0.4B, suggesting a trend of smaller-sized investments.
Tech-enabled firms drove 71% of deal volume in Francophone Africa in 2021, the highest contribution so far
  • The breakthrough year for tech in Francophone Africa was 2021, with 71% of deal volume going to tech-enabled firms, an all-time high.
  • The growth of tech began slowly, from 0% in 2015 to just 12% in 2017, showing how recent the tech surge is.
  • Between 2018 and 2020, tech’s share gradually rose from 15% to 27%, setting the stage for the explosive growth of 2021.
  • Post-2021, tech dominance slightly softened—holding 52% in 2022, 50% in 2023, and 63% in 2024 H1, suggesting a more balanced diversification.
  • The last year traditional sectors led in deal volume was 2020, accounting for 73%, right before tech flipped the narrative.
Since 2012 up to mid-2024, Francophone Africa has had 76 exits, peaking at 13 in 2019
  • The peak year was 2019 with 13 exits, marking the most successful exit year since tracking began in 2012.
  • Zero exits occurred in 2020, likely reflecting the impact of the COVID-19 pandemic on exit strategies and deal closures.
  • The years 2021 and 2022 saw a rebound, with 11 and 10 exits respectively, suggesting a recovery in investor confidence post-pandemic.
  • Slower exit activity was recorded in 2023 and early 2024, with 6 and 3 exits, respectively (2024 is as of H1).
  • From 2012 to 2016, annual exits ranged between 3 and 4, except for a spike in 2013 with 10 exits.
  • The overall average exit volume is low, with fewer than 7 exits per year on average across the 12 years.
Consumer staples, financials, consumer discretionary, and industrials dominate private capital in Francophone Africa, capturing 68% of all investment volume since 2012
  • The consumer staples sector attracted the highest private capital volume with 69 deals.
  • The financial sector shows strong traction, especially as digital finance and fintechs continue to open access to banking services in underserved markets.
  • Fifty-five deals in the consumer discretionary category suggest investors are interested in rising middle-class consumption, retail, and lifestyle-driven spending patterns.
  • At 50 deals, industrials, including manufacturing and infrastructure, remain a backbone for private capital.
  • Healthcare (24 deals) and utilities (37 deals) reflect increasing investor focus on sectors with long-term impact and scalable public value.
POPULAR TOPICS
SIGN UP TO OUR NEWSLETTER
Get periodic updates about the African startup space, access to our reports, among others.
Subscribe Here
Subscription Form
A product of Techpoint Africa. All rights reserved