Africa’s fintech & investment outlook for 2024

February 7th, 2024
Setting the Expectations

Africa’s fintech & investment outlook for 2024

Africa defied the 2022 global ‘VC freeze’ after becoming the only continent to witness an increase in YoY VC investment, but the story for 2023 was not as good. Africa has now joined the rest of the world in recording a 46% YoY decline in funding amount to $3.5B in 2023, as Partech’s annual report showed.

While Fintech once again continues to be the crème de la crème of investors, the sector registered a 56% YoY reduction in value and 48% YOY reduction in deal activities. But not all is doom and gloom as the Briter team showed in their annual report. The 10-year perspective helps to contextualize last year’s market swings and shows that Africa is in fact heading in the right direction with tech ecosystem development recording $22B since 2014. Reminding me of the old adage ‘direction is more important than the speed’ –  despite seasonal slowdowns and market corrections, African fintech will continue to change our future. 

While it is not possible to predict what 2024’s investment will be in numbers and volume with certainty, this is what our team at the Africa Fintech Summit predicts to take place this year

  • The Africanization of global tech will continue: In my outlook for 2022 (HERE), I highlighted that African startups will adopt a global approach to expand globally – even for early-stage startups. We have seen several African startups doing this including Flutterwave’s expansion to IndiaOnafriq’s  acquiring US based GTP and Tymebank’s continual expansion to Southeast Asia successfully. 2024 will show no departure from this strategy. Several African startups will take advantage of our ever-connected world and either acquire firms outside the continent or expand their services globally. 

  • Embedded fintech is the future: We have themed our 2024 AFTS in Nairobi as ‘Fintech in Every Industry,’ showing our expectation that in the mobile-first continent of Africa, will see fintech penetrating through all industries. All sectors stand to benefit from being powered and served by fintechs – including insurance, saving & investments, utilities, mining, trade, healthcare, and education. We will also see non-fintech firms leapfrogging digitally and providing those services ‘embedded’ in their own product offering as many retailers have done across the continent. 

  • Diversification of funding amidst VC slowdown: While the VC funding, that is going through its own LP squeeze, will continue in 2024, African startups will tap into diversified funding sources. This includes debt-financing which his now increasingly more affordable and accessible, DFI & Government backed funding (like the $1B Timbuktoo Initiative by UNDP and African Governments for startups), corporate VC funds, Accelerators and Incubators that are increasing both their ticket sizes and activities across the continent as well as Angel investors who are mainly either Founders-turned-Investors or serial Seed Investors. 

  • Cash is king & unit economics are important: The funding drought in 2023 caught several startups by surprise leaving them no room to adjust chunk & burn rates and hence why 2023 witnessed notable number of startup bankruptcies across the continent. Some proprietary data-points show many startups in the continent, including those seemingly funded well in the past, will be out of cash in later part of 2024 unless new funding comes in or the startups control burn rates and generate positive unit economics. Those who survive the liquidity crunch are those startups with a lase focus on cashflow and unit economics in the spirit of ‘less is more’ when it comes to external funding. 

  • Market consolidation & M&A proliferation amidst corrected valuation: 2024 will witness several African startups consolidations & mergers, partly fueled by horizontal synergy (as in the case of Kenya’s Wasoko & Egyptian MaxAB), OR vertical integration (as in the case of ChipperCash moving to Digital ID services and DSTV’s launch of Fintech arm) OR  ‘a big fish eating a small fish’ (startups with acute cashflow and yet with solid market base agree to be bought by well-funded startups gracefully). 

  • Crypto use cases will grow: Our stand that Cryptocurrency’s future is being defined in Africa remain strong in 2024. While the world is still shaking off and not yet fully recovering the Crypto scams and regulatory hurdles including the FTX saga, daily-life-changing impactful transactions are being powered by Crypto in Africa including faster & cheaper remittance, P2P transactions, and trade finance. Innovative crypto startups will continue to provide user cases for crypto and Africa will continue to lead the pack in crypto uses and innovations. 

  • Impact AI, not glamor AI, in Africa: 2024 will be a year where artificial intelligence will have a huge impact globally. Countless fintech companies will continue deploying AI in their operations. Startups who apply AI in fields that has the massive addressable market and yet unfulfilled need including diagnostics and healthcare, smart farming, climate tech, education & linguistics, cybersecurity, and digital identity will have the most impactful and rewarding AI ventures in Africa. 

  • Logistics & trade tech Innovation pays: While Africa has its own protracted infrastructure and logistics that is yet to be mended by AfCFTA in the medium/long term, 2024 will bring a cocktail mix of logistical headaches for the continent fueled by the red sea crisis that is choking shipping to and from Africa as well as food & oil inflation as a result of heating geopolitics. This will put strain on an already burdened economy and push the inflation barometer across more economies. Startups in logistics, trade tech, and cross border trade that innovate and proactively move trade within and across the continent efficiently, and with currency convertibility across borders, have a crisis to turn to an impactful and profitable opportunity. 

  • Fintech founders leadership quality will matter: In this polarized world, especially as the world hosts several political elections in 2024, tech companies’ thriving will not only be guaranteed by their capital/tech stack and bottom line, but how successfully founders and executives maneuver political and reputational risks. Hence, several startups will be listing services of reputable media houses in adding storytelling, reputational & political risks management advisories, as well as crisis management and response trainings for their executive leadership. 

  • ClimateTech and carbon credit initiatives harnessed by fintechs: At the heels of COP28, Africa has a ‘loss and damage fund’ of $792M on the table while up to $440B is needed by 2030. However, governments and businesses who are carbon neutral or carbon off-setters need climatetech and carbon credit savvy fintechs to handle the complex process of unlocking the funding on the table. Expect fintechs resolving this pain point of carbon credit initiatives to flourish, scale, and power the continent by unlock fundings allocated for climate and sustainability impacts. 

  • Africa will continue to be a magnet for global fintechs:  In my 2020 interview during Stripe’s acquisition of Paystack, I said “…several other global fintechs have been ‘dating’ other leading African fintech startups by participating in investment rounds and in my view the next wave of acquisition comes from those ‘dating’ ….and I expect some of these investors will start to woo the fintechs they invested in and follow Stripe’s footstep in forming other ‘I do’s.” This trend will accelerate in 2024 and most of the global fintechs firms will continue to vie for and invest in the Continent’s fintech space. Expect more expansion, strategic partnerships (example of Coinbase & Yellowcard), and acquisitions. 

  • AfCFTA will expand cross-border trade within: As witnessed by South Africa’s debut shipment of AfCFTA this month, Africa will trade with itself more in 2024; incentivized by the tariff free intra-African trade reality made possible by the free trade area as well as acute forex shortage of several countries impacting global trade and trade route and logistical hurdles. This intra-African trade will be powered by the instant and interoperable settlement of payment by national currencies – made possibly by PAPSS

The year is going to be rough to say the least, unpredictable and testing the tenacity, ingenuity, adaptability, perseverance, and resilience of both African startups, and their founders and teams, investors, and the wider ecosystem. African innovators are not new to shocks and hurdles, and they will shrug these off and come off the other side with leaner, smarter, and more resilient attributes. Africa Fintech Summit will be providing weekly insights through our Africa’s Weekly Fintech Review newsletterAWFR LinkedIn Newsletter, our social media platforms including X(Twitter), LinkedIn as well as our flagship summits in Washington DC as well as Nairobi, Kenya this year where we share more of our insights and subject matter expertise. 

Happy reading and enjoy the rest of your week!    


Zekarias Amsalu 
Managing Director, Africa Fintech Summit 
Founder & MD, Ibex Frontier 

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