African startups raised more than $3.5 billion in 2025, representing a 59% increase year-on-year and a decisive rebound from the funding slowdown of 2023 and 2024. Beyond the headline numbers, the year marked a deeper shift in how capital flowed across the continent – away from cash-intensive consumer plays and toward infrastructure-driven, asset-backed, and long-term investments.
The recovery signalled a maturing ecosystem, where resilience, discipline, and sustainable business models increasingly shaped investor decisions.
FUNDING | African Startups Raised $2.2 Billion in Venture Funding in 2024 – a 29% Drop from 2023
A Funding Renaissance
The $3.5 billion raised in 2025 reflected more than a cyclical rebound. Nigeria, Kenya, South Africa and Egypt — Africa’s “Big Four” startup markets — accounted for 85.7% of total funding, but deal composition revealed a more nuanced evolution.
Momentum built early.
January 2025 saw $289 million raised, a 240% jump from January 2024’s $85 million, making it the second-strongest January for African startups in six years, behind only the 2022 peak. Nigeria and Kenya led the charge, buoyed by large transactions including PowerGen’s $50 million renewable energy raise and LemFi’s $53 million expansion round targeting Asia and Europe.
REPORT | Kenya Topped Africa in Startup Funding in 2024, Major Deals Driven by Climate Tech, Says New Report
By the final quarter, funding activity accelerated sharply. October recorded $441.9 million across 59 deals, up 217% month-on-month from September. November surpassed even that, with $589.9 million raised across 38 deals, driven by two landmark public listings — the first major tech IPOs on the continent since before the COVID-19 pandemic.
South Africa’s Optasia, an AI-powered credit scoring firm, raised $345 million on the Johannesburg Stock Exchange at a $1.4 billion valuation, while Morocco’s Cash Plus secured $82.5 million on the Casablanca Stock Exchange at a $550 million valuation, marking a pivotal moment for African tech exits.
2025 RECAP | The African Stock Market Outperformed Bitcoin and Crypto for the First Time in 2025, Says MyStocks Africa
The Rise of Debt Financing
One of the most consequential shifts of 2025 was the surge in debt financing, which accounted for 45% of total startup funding by mid-year. For the first time, debt funding on the continent exceeded $1 billion, reaching $1.6 billion in the first nine months of 2025.
This reflected growing investor confidence in startups with predictable cash flows and asset-backed models capable of absorbing non-dilutive capital.
Kenya’s clean energy sector exemplified this trend. In July alone, Sun King and d.light captured 83% of Africa’s $550 million clean energy investment, with 89% structured as debt. Sun King closed a $156 million securitisation deal arranged by Citi, while d.light expanded its receivables financing by $300 million – transactions that underscored the institutionalisation of Africa’s energy startups.
FUNDING | Ghanaian Fintech, ZeePay, Secures $18 Million Debt to Scale Cross-Border Payments – A TradFi Model for Crypto Remittances?
Clean Energy Overtakes Fintech
In a dramatic reversal of long-standing trends, clean energy overtook fintech as Africa’s top-funded sector by Q3 2025, accounting for 53% of total investment and reaching $519.5 million. The shift highlighted a growing focus on physical infrastructure – power, mobility, and climate resilience – over purely financial services.
Kenya emerged as the epicentre of this transformation. Clean energy represented 46% of the country’s startup funding, compared to just 13% for fintech, making Kenya the only Big Four market where financial services did not dominate venture inflows.
CALL FOR APPLICATIONS | UNDP’s Timbuktoo Launches Energy Accelerator Programme Targeting African Sustainable, Accessible, and Decentralized Solutions
Regulatory support played a key role. Kenya’s National Energy Policy 2025–2034 and National Energy Compact 2025–2030 prioritised renewable integration into the national grid, with a goal of 100% clean energy by 2030. Meanwhile, Net-Metering Regulations introduced in mid-2024 enabled households and businesses to sell excess renewable power back to the grid.
Deal sizes reflected this momentum. Kenya’s average deal size reached $43.1 million in Q3 2025, double South Africa’s average. Nairobi alone attracted $536 million across 10 deals, accounting for more than half of all startup funding on the continent. Major raises included M-KOPA ($160 million), Spiro ($100 million), alongside Sun King and d.light.
Sun King also announced one of the most ambitious plans of the year: the deployment of 50 million solar kits across Africa between 2026 and 2030, representing $5.6 billion in solar equipment and expanding clean energy access to 200 million people. The rollout would add 3.8 gigawatts of solar capacity, equivalent to several large coal-fired power stations.
See also
Despite losing its top spot, fintech remained a cornerstone of African innovation. The sector raised over $1 billion by September 2025, but funding increasingly flowed to RegTech, embedded finance, and B2B infrastructure, rather than consumer payments and lending.
Nigeria retained its position as Africa’s fintech heavyweight. By mid-2025, fintech funding in Nigeria reached $162.8 million, surpassing South Africa’s total. In 2024, fintech accounted for 72% of startup funding in Nigeria, 70% in South Africa, and 60% in Egypt — a pattern that largely carried into 2025, even as diversification accelerated elsewhere.
OPINION | Africa Needs More Market Creating Startups, We’ve Enough CopyCat Startups
Stay tuned to BitKE on African startups funding.
Join our WhatsApp channel here.
Follow us on X for the latest posts and updates
___________________________________________
