Hello Friends,
Welcome to our first newsletter for 2024. Since the year is relatively new with few activities to journal, this edition will provide a teaser to our upcoming annual Ghana Startup and Innovation Ecosystem Report.
Gold Rush
Ghanaian startups raised $65.5 million in equity and debt across 36 publicly disclosed deals. This represents a 69% decline from the all-time high funding of $209 million in 2022. The downward spiral is not Ghana-specific but a global phenomenon. According to Dealroom, Latin America venture capital (VC) investment experienced the sharpest decline of 60%, while North America and Europe fell by 40% and 37%, respectively. Also, Africa’s VC investment ($2.9 billion) suffered a 39% decline from 2022 (Africa: The Big Deal).
Although funding volumes dropped, deal transactions increased to 34 from last year’s 20. The median deal size is $120,000, which means that most of the tickets raised were relatively low compared to the 2022 size of $ 360,000. Over 75% of the money was raised in quarter Q1 and Q4. The funding momentum sharply declined in Q2, with only $ 3 million raised. It gradually increased in Q3 to $12.9 million and finally hit $27 million in Q4.
Sector Breakdown
Sector-wise, Agritech grabbed the largest chunk of funding at $42.7 million (65%), followed by Logistics and Transportation at $13.3 million (20%). Surprisingly, FinTech experienced the worst decline of 90%. The Agritech funding is led by Degas’ $15 million Series A round, and the Logistics and Transportation is led by Jetstream’s $13 million Pre-Series A round.
Funding Demographic Analysis
In 2023, a noteworthy paradigm shift was observed in the funding landscape. Female CEOs notably secured 25% of the total funding, marking a significant surge from the 8% recorded in 2022. This impressive increase underscores the growing acknowledgement of the substantial contributions made by women founders. Meanwhile, male CEOs maintain a majority share at 75%, a deliberate deviation from the 92% dominance observed in 2022 and reflecting a commitment to fostering a more balanced and diverse leadership milieu.
The paradigm shift was also observed in the demographics of teams funded. Gender-diverse teams secured 26% of the total funding, substantially increasing from the 9% reported in the preceding year. This surge reflects a concerted industry effort towards cultivating diverse talent, recognizing the manifold benefits of varied perspectives in fostering innovation and resilience. Male-only founding teams, while still preeminent at 74%, have declined from the 90% recorded in 2022, symbolic of a growing cognizance of the advantages of an inclusive approach to team formation.
Policy wins
Apart from the startup bill that is not at parliament yet, the startup ecosystem chalked a few policy wins. With technical support from the UNCDF, the Securities and Exchange Commission released a draft version of the crowdfunding act, which has been in the works for about two years. The guidelines outline regulations for various aspects of crowdfunding, including the process of applying for a Crowdfunding Intermediary license, the responsibilities of such intermediaries, the involvement of crowdfunding participants, transaction-related requirements, obligations for issuers, activity restrictions, and additional criteria for soft commodities digital investment platforms.
Additionally, the government announced its plans to exempt electric vehicles for public transportation from import duties for eight years, extend the same benefit to registered EV assembly companies for both semi-knocked down and completely knocked down electric vehicles, and continue the zero rate of VAT on locally assembled vehicles for an additional two years.
Interested in the report? Check out our past reports here
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