why AI start-up funding in Africa needs rethinking
why AI start-up funding in Africa needs rethinking
Publish Date: 2026-02-17 11:05:00
Source Domain: theconversation.com
One year after the AI Summit in Paris, the international community will meet again this week in New Delhi for the Global Summit on Artificial Intelligence, whose objective will notably be to support the diffusion of AI uses in developing countries. In Africa, AI and Tech investment remains concentrated in the “Big Four” – South Africa, Egypt, Kenya and Nigeria – at the expense of other countries across the continent. This analysis explores the causes of this imbalance and the levers that could be used to better direct capital.
Between 2015 and 2022, investment in African start-ups experienced unprecedented growth: the number of start-ups receiving funding increased more than sevenfold, driven by the expansion of mobile technologies, fintech and a massive inflow of international capital. However, from 2022 onwards, tighter economic conditions led to a “funding squeeze” (a reduction in venture capital investment) that was more severe for African start-ups than in other regions of the world. This trend further reinforced the concentration of capital in the countries with the most developed start-up ecosystems, namely South Africa, Egypt, Kenya and Nigeria.
There is, however, a strong case for ensuring that these investments are more evenly distributed across the continent. Beyond stimulating economic activity, the technological innovations developed by these start-ups represent a significant lever for development, as they offer solutions tailored to local contexts: targeted financial solutions, improved agricultural productivity, strengthened health and education systems, and responses to priority climate challenges, etc.
Trends in equity and debt financing granted to technology start-ups in Africa between 2019 and 2024.
Partech, 2024 Africa Tech Venture Capital
Concentration of investment in the Big Four
In the early 2020s, the expression “Big Four” emerged to…
