• African startups raised about $3.1 billion in 2025, up from $2.2 billion in 2024, according to Launch Base Africa.
• Kenya overtook Nigeria as Africa’s top venture capital market, followed by South Africa and Egypt.
• Investors shifted focus toward profitability, debt financing, and infrastructure-linked sectors.

In 2025, African startups raised about $3.1 billion, according to data compiled by Launch Base Africa and published on Monday, January 5, 2026. The amount represented a sharp increase from the $2.2 billion recorded in 2024 and signaled renewed investor interest in African technology projects. Previously, rising global interest rates and increased caution among international funds had slowed investment activity. Nevertheless, funding remained concentrated in a limited number of countries, although the geographic distribution changed.

Nigeria no longer ranked first for venture capital on the continent. The country placed fourth in Africa, with startups raising $410.1 million in 2025. Kenya became the continent’s top investment destination, with startups raising $933.6 million during the year. Investors largely drove this performance through deals in the energy and electric mobility sectors. Moreover, Kenya alone captured nearly one-third of all venture capital raised in Africa, marking a significant shift from a funding landscape long dominated by Nigeria’s startup ecosystem.

South Africa ranked second, with startups raising $625.7 million in 2025. The country continued to benefit from a structured financial environment, active local investors, and broader access to international markets. Egypt ranked third, with $430 million raised, while the country maintained strong activity in fintech, logistics, and digital services. With $154.2 million raised in 2025, Senegal ranked fifth, highlighting a gradual diversification of innovation hubs across the continent.

Nigeria’s decline reflected primarily macroeconomic factors. The continued devaluation of the naira reduced startups’ ability to generate dollar-denominated revenues, which international venture capital funds often require. In addition, high inflation weakened household purchasing power. This environment particularly affected consumer-oriented startups, especially in fintech and e-commerce, where transaction volumes and margins depend heavily on disposable income.

Redefined priorities

In 2025, the African startup ecosystem also recorded several structural shifts. For the first time, startups in Angola and Gabon raised venture capital funding. Although deal volumes remained limited, these transactions signaled a gradual expansion of venture capital into new markets.

Despite the overall $3.1 billion raised, no African startup officially reached a $1 billion valuation in 2025. This outcome contrasted with 2024, when Moniepoint and Tyme Group joined the group of billion-dollar companies. Investors increasingly favored economic viability and cash-flow generation over rapid growth.

Debt financing gained prominence during the year. In 2025, debt accounted for nearly 45% of total funds raised, particularly in the energy and logistics sectors, where projects rely on physical assets and predictable revenues. At the same time, African funds and local institutional investors played a more visible role. They accounted for nearly one-third of recorded transactions in 2025, and their participation helped stabilize funding amid continued caution among some international investors.

Looking ahead to 2026, the market signaled a return of capital flows, but investors directed funds toward projects linked to energy infrastructure, environmental transition, and essential services. However, macroeconomic risks, particularly in Nigeria, remained a central consideration in investment decisions.

This article was initially published in French by Chamberline Moko

Adapted in English by Ange Jason Quenum