Fintech funding into Africa rose by 688% in Q3 despite 25% slump in global funding

African fintech startups only accounted for 3.7 per cent of the total global investments
Africa’s venture funding
Funding into African fintech startups witnessed a steep rise in the third quarter of 2024 despite the downward global trend as financial technology companies on the continent raised $268 million. This is a huge rise from the $34 million investment into the sector in the second quarter, representing an astounding 688 per cent increase.

The Q3 total also represents a 104.5 per cent growth compared to the first quarter of the year when financial technology companies around the continent raised $131 million. This easily makes the quarter the best-performing quarter of the year, easily dwarfing the numbers of the previous quarters combined.

Indeed, Q3, 2024 is the best performing quarter in over a year looking back as the highest before now was in the first quarter of 2023 when African fintech startups raised $412 million. The continent’s fintech space did not witness a better quarter in the 5 quarters that followed.

While the continent might have recorded an impressive run in the just-ended quarter, the feat looks less impressive when you consider the fact that the impressive growth was majorly down to one startup which contributed more than half of the total.

That startup is MNT-Halan, a company from Egypt which raised $158 million in a Series E round back in July. MNT-Halan’s raise meant the startup alone contributed 58.7 per cent to the African total.

Egypt’s MNT-Halan raises $400M to become Africa’s latest unicorn
MNT-Haalan founders
Aside from the Egyptian fintech giant, other African startups that raised $2 million and above include Kenya’s Nala which raised $40 million in a Series A round back in July representing 14.9 per cent of Africa’s total pool. There is also Paymob, another Egyptian startup that raised $22 million in September, representing 8.2 per cent of the total.

dopay, another Egyptian startup raised $14 million in July, representing 5 per cent of the quarterly total. Yellow Network from Seychelles raised $10 million in September, representing 3.7 per cent of the total while South Africa’s Omnisient raised $8 million, representing 2.8 per cent.

Egyptian fintech, Lucky and Seychellois startup, Thalex, both raised $3 million apiece representing 1.1 per cent each. Happy Pay from South Africa, SETTLE and Synapse Analytics both from Egypt all raised $3 million each, representing a contribution of 0.7 per cent each.

African fintech funding rise comes amid a global downturn
This is coming even as investments into the global fintech space suffered a huge decline as financial technology companies around the world raised $7.3 billion. This represents a 25 per cent quarterly decline from the $9.7 billion raised in the preceding quarter according to stats from CB Insights.

The global third quarterly sum ($7.3 billion) also represents a nearly 4 per cent decrease from the $7.6 billion raised in the first quarter of the year. This essentially makes Q3, 2024 the slowest quarter of the year. The number also means the sector only contributed 13.3 per cent to the total tech startup funding for the quarter ($54.7 billion).

This also means, for its impressive numbers, African startups only accounted for 3.7 per cent of the total investment into the space globally.

“While funding tumbled quarter-over-quarter (QoQ), the drop wasn’t as severe as it looks. The prior quarter’s level was propped up by $1.3B worth of funding to Stripe and AlphaSense. Excluding these rounds, the decline from Q2’24 to Q3’24 would have been 13 per cent,” the CB Insights report said.

Funding into African fintechs rose by 688% in Q3 despite 25% slump in global fintech funding
Credit: CB Insights
The global fintech funding decline follows an overall decline in the global tech startup space. The $54.7 billion raised between July and September 2024 was a far cry from the $68.1 billion raised by startups around the world in the preceding quarter (Q2, 2024), representing a significant 19.7 per cent decline. It is also way less than the $62 billion worth of investment attracted in the first quarter of the year, representing an 11.8 per cent decline.

The total global startup funding attracted in the third quarter is also the lowest funding number recorded since 2020, falling below the $54.9 billion recorded in the fourth quarter of 2023 which was the previous lowest. Not even during the pandemic of 2020 did the global ecosystem witness such a decline as is recently witnessed, with funding figures going from $61.5 billion in the second quarter of 2020 to peak at $97.5 billion in the last quarter of that year.