Too little, too concentrated: Why AI start-up funding in Africa needs to be rethought

A year after the AI ​​Summit in Paris, the international community is meeting again this week in New Delhi for the Global Summit on Artificial Intelligence, the main aim of which will be to support the spread of AI applications in developing countries. In Africa, investment in AI and technology continues to be concentrated in the “Big Four” – South Africa, Egypt, Kenya and Nigeria – at the expense of other countries across the continent. This analysis examines the causes of this imbalance and the levers that could be used to better direct capital.

Between 2015 and 2022, investment in African startups experienced unprecedented growth: the number of startups funded increased more than sevenfold, driven by the expansion of mobile technologies, fintech and a massive inflow of international capital. However, starting in 2022, tightening economic conditions led to a “funding squeeze” (a decline in venture capital investment) that was more severe for African startups than in…