At a major tech gathering in Morocco, startup funders are tightening their belts and looking at debt funding.
Startup businesses from across Africa convened in Marrakech in April for GITEX Africa, one of the tech industry’s biggest gatherings on the continent. In the cavernous exhibition spaces of the city’s exhibition centre firms demonstrated their technology, learned from like-minded peers and attempted to persuade funders to get out their chequebooks. This was the third year of the continent’s spin-off event from the Gulf Information Technology Exhibition held in Dubai.
Following US President Donald Trump’s global trade war and reduced expectations of global economic growth, the mood at this year’s gathering was somewhat muted, and the data shows why.
African startups attracted an estimated $2.8bn in new investments across 750 reported deals in 2024. This marks a sharp deceleration from 2023, when startups raised $3.9bn across 930 disclosed transactions, according to a report by Briter, a market intelligence and research firm focused on emerging markets. The value of deals fell by 28% year-on-year while the total number of transactions decreased by 19%, the report reveals.
Given the tight funding environment, startups have to do ever more to stand out from the crowd, offer attractive investment terms and prove their worth to investors in double-quick time. The days of hoovering up speculative capital based on the promises of future windfalls appear to be drawing to a close.
Raising capital by offering equity stakes to investors has become an increasingly uphill task for founders and their management teams, compelling many startups on the continent to explore other strategies of funding their growth ambitions.
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