Why African Startup Funding in 2025 Is Surging Again After Years of Decline

After years of silence and skepticism, Africa’s startup scene is roaring back to life, and the $1.4B raised so far in 2025 is only the beginning.


African startup funding in 2025 is off to a strong start, with startups raising $1.4 billion in the first half of the year — a 78% increase compared to the same period in 2024 — signaling a potential rebound after two years of decline, according to data from Africa: The Big Deal. The surge marks the strongest half-year showing since 2023 and comes after venture capital funding across the continent dipped 25% to $2.2 billion last year.

The turnaround has been powered by headline deals such as Nigerian fintech LemFi’s $53 million raise in January, and signs suggest more big rounds are on the horizon. Mobility startup Moove, a vehicle financing partner to Uber, and digital payments platform PalmPay are reportedly in talks to secure nine-figure rounds — potentially pushing the full-year total for African startup funding in 2025 beyond last year’s levels.

While this recovery is promising, Africa still represents the smallest portion of global VC. In 2024, total venture capital investment on the continent was just $2.6 billion — trailing far behind North America’s $182.7 billion, Asia’s $65.8 billion, and Europe’s $50.1 billion, according to regional breakdowns of VC activity.

Despite the capital disparity, analysts say Africa holds untapped potential. Markets like Nigeria, Kenya, Egypt, and South Africa continue to grow digital-first startups across fintech, edtech, and healthtech. The challenge is not innovation, but access to growth capital — especially at later stages. Currency volatility, infrastructure gaps, and limited local VC pools remain key hurdles.

Still, African startup funding in 2025 could shape up to be one of the continent’s strongest years yet — if current momentum continues and larger rounds close in H2 — even as global VC remains heavily concentrated in mature markets.

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By George Kamau

I brunch on consumer tech. Send scoops to george@techtrendsmedia.co.ke

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