by African tech funding dropped by 5% in the first quarter of 2025 compared to the same period in 2024. Startups across the continent raised $460 million, down from $486 million last year, according to Africa: The Big Deal.
This decline highlights ongoing challenges in Africa’s venture capital landscape, even as some regions and sectors show resilience.
A Quarter of Contrasts: Strong Start, Weak Finish
The year began with optimism as January saw nearly $300 million in funding. However, momentum slowed significantly in February, which recorded $119 million, and collapsed in March with just $50 million raised—the lowest monthly total since late 2020. The lack of large funding rounds exceeding $10 million was a key factor behind the slump.
Despite the decline in dollar amounts, the number of startups securing at least $1 million remained steady at 52 deals, aligning with previous years’ averages.
This suggests that while big-ticket investments are waning, smaller deals continue to sustain activity across the ecosystem.
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The Big Four Dominate African Tech Funding
Kenya, Nigeria, South Africa, and Egypt—dubbed the “Big Four”—continued to attract the lion’s share of funding. Together, these countries accounted for 83% of total investments in Q1 2025.
Nigeria and Kenya led the pack with approximately $100 million each (24% of total funding), followed closely by South Africa ($100 million) and Egypt ($61 million).
Togo emerged as a surprise contender in the top five thanks to Gozem’s $30 million Series B round. This marked a rare bright spot amid an otherwise subdued quarter.
Nigerian Startups Corner 80% of West African Funding
Nigeria solidified its position as West Africa’s tech powerhouse, capturing an impressive 80% of the region’s total funding. Despite the broader funding squeeze, Nigerian startups raised $100 million in Q1 2025.
This dominance underscores Nigeria’s role as a hub for innovation and investment within West Africa.
Key players driving this success include fintech giants like Flutterwave and Opay, which continue to attract significant investor interest. Nigeria also boasts the highest number of African unicorns—startups valued at over $1 billion—further cementing its leadership in the region.
Fintech Leads While Other Sectors Struggle
Fintech remained the most attractive sector for investors, accounting for nearly half (46%) of all African tech funding in Q1 2025. Notable deals included LemFi’s $53 million raise and Naked’s $38 million round.
The energy sector followed with an 18% share of total funding, while logistics and transportation startups secured 10%.
This sectoral dominance reflects Fintech’s continued appeal as a driver of financial inclusion and innovation across Africa.
Gender Disparities Persist
The gender gap in African tech funding remains stark. In Q1 2025, female-led startups received just 2% ($10 million) of total investments. Excluding grants, this figure drops to a mere 0.7%. In contrast, male-only founding teams secured 67% of all funds.
While diverse founding teams attracted 20% of investments—a modest improvement—solo female founders or all-female teams received only 1%, highlighting persistent inequities within the ecosystem.
Looking Ahead: Challenges and Opportunities
The decline in African tech funding raises concerns about whether the continent can regain its momentum after a challenging year in 2024. However, steady deal activity and continued interest in key sectors like fintech suggest underlying resilience.
As Nigeria leads West Africa’s startup ecosystem and fintech continues to dominate across regions, opportunities for growth remain. Addressing gender disparities and diversifying investment across sectors and regions could further strengthen Africa’s position on the global tech stage.
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