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African startups will have to become comfortable with longer fundraising timelines, a new report suggested, as dealmakers flock to early-stage ventures.
According to data compiled by Senegal-based investor Partech Partners, the average amount invested in seed-stage African startups rose to $1.6 million last year, up 26% compared to 2023, while that plowed into later growth-stage startups rose 15% to nearly $40 million.
But ticket sizes for those at Series A and B rounds — where money is crucial to solidify traction and product-market fit — fell by 18% and 27% respectively. The time it takes for startups to complete fundraising at both stages is increasing too.
Rising interest rates worldwide sparked a withdrawal of global venture capital on the continent. Investors who remain active in Africa now fund startups at an early stage where the ticket sizes are smaller.
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