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African Startup News #1
Welcome to the first edition of African Startup News, your go-to newsletter for all the latest updates, insights, and success stories from the African startup landscape. Let’s delve in.
Seeking an Angel: African Startups Face Funding Challenge Despite their innovative solutions, African startups struggle to secure funding. A case in point is Kubik, an Ethiopian startup converting plastic waste into construction blocks, which recently secured several million dollars to scale up its operations after winning the AfricaTech award. Lack of ‘business angels’ is a significant hurdle, with only $5.4 billion of the global $415 billion risk capital deployed to Africa.
At the same time, European startups are also grappling with a drop in funding. According to data from venture capital firm Atomico, funding for European tech startups is set to decrease further by 39% in 2023. This significant drop is mainly due to the retreat of U.S. investors. A harsh year for the technology industry in 2022 saw investment for private tech startups in Europe decline by 22% to $83 billion, down from $106 billion in 2021.
These situations show that startups globally are feeling the squeeze as they are being pushed to prioritize profitability over growth. Investors, on the other hand, are reevaluating their positions in these companies amidst global factors such as geopolitical…
