In 2024, the global fintech landscape showed signs of stabilization after years of decline, with total funding reaching $33.7 billion. While this marked a 20% drop from 2023, the year-over-year decline was the smallest in three years, signaling cautious optimism in mature markets.
However, Africa’s fintech sector continues to grapple with funding challenges. In Q4 2024, it raised only $0.1 billion across 18 deals, a stark contrast to other regions.
Global vs. African Performance:
According to a report by CBINSIGHTS conducted last year, fintech deals declined globally by 17 percent, from 4,331 in 2023 to 3,580 in 2024. However, the US and Europe led the recovery, attracting $3.9 billion (293 deals) and $1.9 billion (179 deals), respectively, in Q4 alone. In contrast, Africa’s performance was significantly lower, contributing just 0.2 percent of global funding and fewer than 0.5 percent of the total deal count during the same quarter.
Africa’s median deal size in 2024 was $2 million, an improvement from previous years but still below its global peers for comparison, the the United States had a deal size of $4.4 million, Europe had a deal size of $3.5 million, Asia had a deal size of $3.4 million,, and Latin America had a deal size of $2 million.
Mega-rounds (deals exceeding $100 million) have become a key indicator of investor confidence. Globally, such rounds accounted for $12 billion of the total funding in 2024, with 11 mega-rounds occurring in the US during Q4 alone. Africa recorded only one mega-round deal throughout the year, underscoring the region’s struggle to transform startups into unicorns.
The report again shows that the global fintech ecosystem surged in mid- and late-stage funding, particularly in the payments and banking sectors. Payment companies accounted for half the top equity deals globally in Q4 2024, highlighting a push to digitize commerce and B2B exchanges.
However, early-stage deals in Africa still dominated the landscape, representing 71% of total deals. Late-stage investments remain scarce, indicating a lack of growth capital for scaling businesses.
According to the report, Africa’s underwhelming performance in fintech funding can be attributed to several factors: Regulatory Barriers which give way to inconsistent policies across countries that deter international investors.
Limited Access to Capital: Venture capital penetration remains low, with only a handful of firms actively investing in African startups. Underdeveloped Infrastructure: The report noted that the lack of advanced digital and financial infrastructure hinders the scalability of fintech solutions.
Nevertheless the report also showed that despite these hurdles, Africa continues to innovate, especially in areas like mobile payments and financial inclusion. Companies like Moniepoint in Nigeria, which secured a $110 million Series C funding round, exemplify the region’s potential to create impactful solutions tailored to underserved markets.
Meanwhile, as global markets show signs of recovery, Africa’s fintech sector has a unique opportunity to leverage its strengths. With a young, tech-savvy population and rising demand for financial services, the region could unlock significant growth if structural challenges are addressed.
Experts emphasize the need for robust policy frameworks, enhanced regional collaboration, and increased participation from global investors to help African fintechs thrive globally.
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