The three countries shared 80 percent of the $129 million total funding that flowed to 146 startups in the continent representing a 17 percent increase from 2015.
Egypt experienced over 100 per cent growth in fundraising, making it the fourth ranked destination.
According to the report by Disrupt Africa, 26 Kenyan startups raised funding, more than Nigeria, putting the country 2nd behind SA. This was up almost 50 per cent on previous year.
However, the overall amount of funding raised by Kenyan startups fell by almost 80 percent, to just over $10m, placing it third, narrowly ahead of Egypt and Ghana.
“There continues to be strong interest in Kenyan startups but we are seeing it at smaller ticket sizes,” said Disrupt Africa Co-founder Tom Jackson.
The report reveals the Fintech sector received the most backing in 2016 out of the 9 sectors analyzed, with startups in this space raising a combined $31.4 million.
New to this edition, the report also makes available data on the startup acquisitions which took place in 2016, as well as the results of surveys relating to preferences and trends within the entrepreneur and investor communities on the continent.
Gabriella Mulligan, co-founder at Disrupt Africa, said the African tech startup ecosystem progressed in leaps and bounds over the course of the year.
“This is evidenced by strong growth in the number of startups raising funding, and an encouraging expansion of ecosystem activity across the continent,” said Mulligan.
The report notes the Africa tech space has not been immune to the economic pressures faced by other sectors, “but it is proving extremely resilient,” adds Jackson.
“The fact more startups raised funding in 2016 than ever before demonstrates the vitality of this sector, and we expect investor interest to grow and grow over the course of 2017.”