Get a sneak peek! Ahead of our July release of the Ghana Innovation & Startup Ecosystem Report (H1 2024), we’re sharing some key insights with our valued readers. This report offers a snapshot of Ghana’s startup scene, educating stakeholders, tracking trends, highlighting successes and challenges, and ultimately fostering a thriving entrepreneurial environment through investment and collaboration.
After the 2022 funding splurge by early-stage investors, 2023 was the hangover year where startup funding dip by 69%. According to our Gold Rush tracker, for H1 2024, there is a mild recovery in startup funding. So far (January-to-date), Ghanaian startups have raised $40.1 million. Compared to H1 2023, startup funding has surged by 55.47%. While this uptick suggests cautious optimism, a more complete picture will emerge with data from the latter half of 2024.
Quarterly startup funding deep dive
In quarter one, there was a 54.8% increase in funding from Q1 2023 to Q1 2024. This suggests a potential rebound in startup funding in 2024, although still significantly lower than Q1 2022 ($111.6 million). Q1 usually have a backlog of deals that we concluded in the latter part of the previous year, so it is not surprising that it usually has a lot of transactions. During the second quarter, there was a significant 171.8% increase in funding from Q2 2023 to Q2 2024. However, similar to Q1, the data for 2024 remains lower than Q2 2022 ($86.0 million). Although we are highly sceptical about 2024 Ghanaian startup funding reaching the 2022 levels of $111 million, we keep our fingers crossed.
What type of financing is being provided by investors?
In the first half of 2024, Ghanaian startups secured funding through a mix of financial instruments, with a clear preference for equity financing. Equity dominated, raising a significant $38,156,230, translating to roughly 92% of the total funding secured. This suggests a focus on long-term growth and the potential for high returns for investors. Debt financing also played a role, contributing $1,950,000, potentially catering to startups with specific needs or lower upfront costs. Interestingly, while a smaller portion at $1,295,000, grant funding provided a crucial boost for early-stage development or ventures with a social impact focus. Notably, a significant portion of this grant funding came from the MEST Mastercard Edtech Fellowship program, which awards $60,000 to selected startups. This diverse mix of funding options highlights the strategic approach of both startups and investors in navigating the Ghanaian funding landscape.
Which sector is the darling of investors?
While the agricultural sector secured the most deals (9), fintech took back its righful place as the darling of venture investors. With a whopping $21,500,000 raised, fintech outpaced all other industries, showcasing investor confidence in the digital transformation of financial services in Ghana. This significant investment, spread across just 3 deals, suggests a focus on high-impact ventures with the potential to revolutionize the financial landscape. Following fintech, agritech follows closely with $18,083,399, highlighting the continued importance of innovation in agriculture. Education & Jobs comes in third with $1,260,831 distributed amongst 14 deals. Healthcare attracted 3 deals while securing only $300,000.
Stay tuned for the release of the full Ghana Innovation & Startup Ecosystem Report for H1 2024 in July. This report will offer a richer analysis, potentially including breakdowns by funding stage, investor types, and geographical distribution. With this detailed data, we can better understand the trends shaping Ghana’s dynamic startup scene.
