After two difficult years, funding for African tech is recovering, but the landscape has changed, with more debt, less exuberance, and a market that is tightening, concentrating, and growing more selective.

The headline number is reassuring, but the underlying trend remains open to debate. African tech startups raised $4.1 billion in 2025, a 25% increase that suggests the ecosystem has moved beyond the 2023-2024 slowdown triggered by global monetary tightening and falling valuations. The latest Partech report confirms this rebound.

Yet behind the apparent improvement, a quieter shift in financing is taking shape. It is marked by less exuberance, more debt, and a more polarized funding landscape. The ecosystem seems to have entered a more sober phase. The market is recovering, but not in the same way as before.

The most important development is not simply the rebound in overall funding, but the changing nature of the capital itself. In 2025, debt accounted for 41% of total funding, reaching $1.6 billion, a 63% increase. With 107 transactions, debt financing hit a record high. This compares with 31% in 2024 and just 17% six years earlier.

This shift matters. It points to the emergence of a smaller group of startups mature enough to access non-dilutive financing. It also reflects broader caution across the market. Founders are seeking to preserve equity, while investors are limiting their exposure to valuation risk. Debt is increasingly both a tool for growth and a mechanism of discipline.

While it can signal maturity, it also highlights a tougher environment, one less willing to finance long-term bets without clearer commercial prospects. The era of easy optimism is fading. Revenue, margins, and credible business models are now central.

Equity, but on tougher terms

Equity has not disappeared, but conditions have tightened. At $2.4 billion across 462 transactions, equity funding rose by only 8%, and its character has changed. Investors are returning cautiously. Ticket sizes are increasing, particularly in Series A and B rounds, while the seed segment remains under pressure.

Although average deal sizes are rising, the selection process has become more demanding. Early-stage innovation is bearing the brunt of this global caution.

This rebalancing reflects a shift in the cycle. Capital is concentrating on companies that can demonstrate commercial traction and financial discipline. The message is clear: African venture capital is now asking for proof. Promises alone are no longer enough.

As in previous years, the recovery remains highly concentrated. Kenya, South Africa, Nigeria, and Egypt captured 72% of total funds raised. Kenya recorded the highest volumes with $1.04 billion, driven by large debt rounds and four of the nine mega-deals seen in 2025.

South Africa regained the lead in equity. For the first time since 2017, it ranked first in equity financing both by amount and by number of deals. This performance is structural rather than driven by a handful of exceptional transactions, reflecting steady deal flow.

Nigeria remains one of the most active markets despite lower volumes. Egypt continues to show a solid pipeline, with deal sizes increasing. Beyond these four hubs, funding drops off sharply. Only Senegal, Morocco, and Ghana surpassed the $50 million mark in equity funding.

A persistent reality remains: access to capital is deeply unequal. The ambition of a continent-wide tech ecosystem still rests on a small number of strongholds.

Fintech less dominant, a more mature ecosystem

Another important signal is the relative decline of fintech. It remains the leading sector, with $769 million raised, representing 25% of equity funding, but it is no longer overwhelming the landscape. Cleantech raised $550 million, up 186%. Healthtech reached $215 million, up 232%. Enterprise solutions attracted $238 million, up 55%.

These sectors are gaining momentum and crossing important thresholds. For the first time since 2021–2022, several non-fintech sectors each exceeded $200 million. This is a strong indication that the African ecosystem is gradually broadening beyond a single dominant narrative.

This may be one of the most encouraging conclusions of the report. Sector diversification is no longer just an ambition. It is becoming measurable.

Startups founded by women are also making progress, albeit slowly. They accounted for 10% of total funding and 19% of transactions. While the figures are improving, the gap remains. Here too, the maturity of the ecosystem is reflected not only in its gains, but also in its persistent shortcomings.

Fiacre E. Kakpo