In the first quarter of 2023, funding for African tech companies increased by 57%.

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African tech startups raised 57.2% less capital in Q1 of 2023 than they did in the same period last year. This is according to data released by Disrupt Africa.

As other ecosystems were grappling with the effects of the economic downturn which saw VC inflow plummet, 2022 was an unexpectedly successful year for venture capital in Africa. African startups were able to soar.

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Data by global investment platform Partech shows that venture capital funding in Africa’s tech ecosystem went up by 8% in 2022, surpassing the record set in 2021 and totalling $6.5 billion.

However, it seems like 2023 is the year the chickens come home to roost for the ecosystem. Disrupt Africa reports that between January 1st and March 31st, African startups raised $649 million. The same period in 2022 saw startups raising $1.5 billion.

In terms of deal volume, the numbers are not looking any less gloomy. While in the same period last year, 175 African startups had raised capital, this year, this number has been slashed to only 87, a more than 100% decline.

The reason why this aggressive decline is particularly concerning is that last year, funding in Q1 made up more than half of the total capital raised by African startups in 2022. If the same trend holds for 2023, it would mean that African startups will raise even less capital throughout the rest of the year.

Some of the major deals announced in the Africa ecosystem in Q1 include Planet42’s $100 million combination of debt and equity raise in February, Lulalend’s $35 million raise, and Carry1st’s $27 million raise.