• M&A deals in African tech hit a record 29 in H1 2025, led by fintech and market consolidation.
• 20 startups expanded regionally or globally, with Nigeria and Egypt leading.
• Funding rose 78% to $1.42B; layoffs fell sharply, signaling recovery.

Mergers and acquisitions (M&A) are becoming an increasingly important growth strategy for established African startups, which are seeking to expand market share, strengthen talent pools, or acquire innovative technologies. This is according to a report published Thursday, July 24, 2025, by digital economy consulting firm TechCabal Insights.

Titled "The State of Tech in Africa H1 2025: Building momentum through strategic partnerships," the report stated that 29 M&A deals were recorded in the African tech ecosystem during the first half of 2025. This marks the highest number ever recorded on a half-year basis, representing a significant 45% increase compared to the first half of 2024 and a 53% increase from the same period in 2023.

This acceleration in consolidation signals a maturing market where strong, financially sound startups are acquiring competitors. Conversely, early-stage startups that have struggled to raise funds have sought acquisition or merger with better-capitalized peers.

A sectoral breakdown of M&A deals in the first six months of 2025 shows the financial technology (fintech) sector leading with 13 operations. E-commerce followed with 6, mobility with 3, telecommunications and health technology (healthtech) each with 2, deeptech with 2, and climate tech with 1.

Regional distribution reveals North Africa led with 8 deals, followed by East Africa with 7, West Africa with 6, and Southern Africa with 4. Four transactions also involved startups based outside the continent.

Notable transactions include Nigerian fintech LemFi's acquisition of Irish fintech Buttercrane, and B2B e-commerce player MaxAB-Wasoko's acquisition of Egyptian startup Fatura. MaxAB-Wasoko operates in Egypt and Kenya.

International Expansion as a Growth Driver

The report also highlighted that 20 geographic expansion operations, defined as entry into one or more new markets inside or outside Africa, were recorded in the African tech scene during the first half of 2025, compared to 19 in 2023. A special emphasis was placed on international markets. Of the 20 expansions, nine involved African startups expanding beyond the continent, reflecting a clear strategy for global competitiveness.

Within the continent, tech startups focused on large-scale regional expansions rather than launching in single countries. Five expansions spanned multiple African countries, while four targeted new markets in West Africa, showing a strong ambition for pan-African or regional leadership.

This movement is primarily driven by Nigerian and Egyptian startups, which completed five and four expansions, respectively, beyond their borders, leveraging their strong local foundations.

Layoffs and Funding Trends

African startups laid off 765 employees in the first half of 2025 due to bankruptcies or efforts to streamline operations and extend their financial runway. This figure is down 55.7% compared to the same period in 2024, indicating relative market stabilization after two years marked by a funding drought. Most layoffs occurred in Nigeria, with 416, and Kenya, with 328, following the closure of six startups, including Nigerian fintech Okra and Kenyan fintech Lipa Later.

Meanwhile, the report revealed that African startups raised $1.42 billion in the first half of 2025, a 78% increase compared to the same period in 2024. Four countries, Nigeria, Kenya, Egypt, and South Africa, accounted for 76.34% of the total funding raised.

Regarding the outlook for the African tech ecosystem, TechCabal Insights expects an acceleration in M&A activity and an increase in funding, as the venture capital market warms up again.

Walid Kéfi