Egypt led in the total equity funding raised by start-ups in Africa from June 2022 to June 2023, toppling Nigeria, according to data released by an industry group on Tuesday.

The North African country surpassed Nigeria - the continent's largest economy - as entrepreneurs raised $540 from June 2022 to July 2023, the African Private Equity and Venture Capital Association (AVCA) said in a report.

Although this was a 25% decrease from the $710 million raised the previous year, it was the least decline among the big four African countries that raised the most financing, the report showed.

Egypt was also the only country to climb over the half-billion mark within the period.

Funding to tech firms in Nigeria fell the most at 77% year on year to $470 million from $2 billion, the group which promotes private investment in Africa said in its report.

South African start-ups lost 53% of their investment, plummeting to $420 million, while deal making in Kenyan fell by 69 percent to $300 million during the same period.

During 'the funding heatwave' between June 2021 and June 2022, the Big Four - Nigeria, Kenya, South Africa and Egypt - jointly raised $4.6 billion. This fell to $1.7 billion in the 'funding winter' between June 2022 to July 2023, AVCA said in its report. 

The 'funding winter' first bit the US and China before spreading. 

The financials sector, popularly known as fintech, continued to attract most equity funding, though at a slower pace, AVCA said.

Over the years, the success of companies like Nigeria’s Paystack, acquired in 2020 by US payments firm Stripe, and fellow unicorn startup Flutterwave has fueled deal making in Africa.

Other notable successes are payments platform MFS Africa, Kenyan fintech and solar firm M-Kopa and e-commerce company Wasoko. 

However, it was not all doom and gloom this year the report said. 

"Against all odds, three markets managed to pull off growth in this unfavourable context," the report co-authored by Maxime Bayen, the Operating Partner for Catalyst Fund, and Max Cuvellier, Head of Mobile for Development, GSMA who co-authored the report said.

Funding grew 15% in Côte d’Ivoire and 34% in Cameroon. The biggest jump by far was recorded in Algeria from $30m to $150m, attributable to a single deal - YASSIR's investment in November 2022. 

Noureddine Tayebi, Founder and CEO of YASSIR, a multi-sided marketplace offering on-demand services such as ride hailing, food and grocery delivery, banking and more, raised $150 million in Series B funding from a series of prominent global investors.

(Editing by Seban Scaria