Ugandan startups raised $19m in the first half of 2024, as per Africa: The Big Deal data. Overall, African countries raised $780m which is a 57% decline from what African startups managed to raise in H1 2023. It is also a 31% decline from what was raised in H2 2023.
The $19m raised by Ugandan startups was good enough for 7th on the continent. Kenya was the most attractive destination for funding, attracting $244m in H1 2024, edging out the other big four members; Nigeria ($172m), Egypt ($101m) and South Africa ($85m). Together, the big four accounted for 79% of all funding raised.
Benin and Ghana finished 5th and 6th respectively, raising $50m and $29m respectively. Only Morocco ($14m) and Senegal ($11m) were the only other countries to raise at least $10m.
The biggest overall funding round in H1 2023 was raised by Moove, a Nigerian mobility fintech company that provides revenue-based vehicle financing and financial services to mobility entrepreneurs. It raised $110m.
The second biggest funding round was raised by M-Kopa, a Kenyan fintech startup that provides affordable, pay-as-you-go solar home systems, smartphones, appliances, and other essential products to underserved communities across the continent including Uganda. They raised $51m. The third biggest raise was Spiro, a manufacturer of electric motorcycles, headquartered in Benin raised $50m.
Transport and logistics was the most funded sector, raising $218m or 28% of all funding, followed by fintechs with 24% or $186m and energy and water with 17% of all funding ($132m).
The bulk of the funding raised by Ugandan startups in H1 2024 was raised by Watu, an asset fintech company in January. Watu specialises in providing loans for mobility and connectivity assets like smartphones, two and three-wheelers, electric motorbikes and cars. The startup raised a $15m debt from Gateway Partners through their Africa Credit Opportunities Fund.
Irene Mwoyogwona: Beyond the Numbers – How Pride Bank's Award-Winning CFO Combines Profitability and Social ImpactOther notable raises by Ugandan startups include a $650k raise by PowerUp, an electric cooking startup. The startup announced a seed funding round, which was led by Delta40, a venture capital firm based in Nairobi. The funding enabled PowerUP to expand into new geographies and develop additional products.
Another Ugandan startup to raise funding in the first half is the e-mobility startup, GOGO Electric which raised $1.6m. Others include Inputi, an agritech startup as well as investment platform Level Africa and Operata, a mobile money management software. The latter two raised funding from Renew Capital.
Funding has been in short supply as the funding winter continues to ravage the global startup ecosystem. The global funding winter, characterised by a significant reduction in venture capital investments, has impacted startups worldwide since 2022.
Several factors have contributed to this phenomenon, including rising interest rates, geopolitical uncertainty, a shift in investor focus towards profitability over growth, and concerns about overvalued startups.
As a result, startups have faced challenges such as mass layoffs, cautious investor sentiment, and a decrease in mergers and acquisitions. However, the funding winter has also forced startups to become more efficient, cut cash burn, and focus on sustainable business models.
While the funding winter is expected to persist in 2024, startups that demonstrate a clear path to profitability, strong unit economics, and efficient resource utilisation are more likely to attract investor interest
