African startups are weathering the funding storm with acquisitions

African startups are weathering the funding storm with acquisitions

African startups are weathering the funding storm with acquisitions
African startups are weathering the funding storm with acquisitions


A new report from Africa’s foremost digital economy consultancy, TechCabal ( Insights has revealed that acquisitions have become more frequent in Africa’s tech ecosystem, showing signs of a maturing market. According to the report, 2021 saw 32 acquisition deals on the continent. At the end of Q3 2022, there were about 43 acquisition deals, signaling a consolidation trend.

After two years of continuous growth in VC investment, funding announcements have hit a plateau. Startups have resorted to cutting costs to extend their runway, and acquisition deals have become necessary for survival, particularly with startups operating in the same market. The number of acquisitions between startups operating in the same market increased from 31% in Q2 to 52% in Q3 2022.

The State of Tech in Africa Report compiled by TechCabal Insights, also found that the average seed ticket size remained stable at $2.5M in Q2 and $2.7M in Q3.

A new narrative has emerged in Africa in recent years, embodied by the exponential growth of funding for technology startups. Investment in African startups grew 18x between 2015 and 2021 and 2x faster than global rates between 2020 and 2021. However, beyond the funding stories, there are the quieter tales of exits. By the end of H1 2022, African-focused private capital investors had already made 22 full exits, representing about a 29% increase compared to the 15 exits made in 2021 H1.

Commenting on the findings of the report, Olanrewaju Odunowo, Head of TechCabal Insights, said “When it comes to Africa’s evolving tech ecosystem, appropriate context and nuances must be taken into account. Data without context is imbalanced and misleading and can lead to the wrong outcomes. Beyond crunching the numbers, we have gathered robust insights drawn from primary interviews with leading industry experts. Our aim with this report is to present easy-to-digest insights and data points that anyone – from founders to investors – will find valuable. ”

The State of Tech Report Q3 is available to access for free on 

Distributed by APO Group on behalf of TechCabal.

To speak in more detail about how the TechCabal Insights team can provide actionable insights for you, please email:
Olanrewaju Odunowo
Head, TechCabal Insights

Favour Ogunlana
Head of Partnerships

About TechCabal Insights:
TechCabal Insights is a digital economy consulting service focused on custom research, industry strategy and digital transformation projects. Our mission is to provide practical and contextual answers and solutions for players in digital economies in emerging markets.