Startup shutdowns in Africa jumped 50 percent in 2025, erasing more than $52 million in previously raised capital, as a prolonged funding winter forced ruthless reckoning across the continent’s tech ecosystem, exposing weak unit economics, fragile operating models, and the limits of growth built on cheap capital.
According to the 2025 State of Tech in Africa report, at least 18 African startups shut down in 2025, up from 12 in 2024, marking a sharp acceleration in the market correction that began when global venture capital tightened in late 2022.
The closures collectively destroyed about $52.2 million in disclosed pre-closure funding, underscoring how even ventures that had attracted meaningful investor backing ultimately failed to survive worsening macroeconomic conditions, regulatory pressure, and operational constraints.
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Nigeria accounted for the largest share of the shutdowns and the heaviest capital losses, reflecting both its dominance in Africa’s startup scene and its exposure to currency volatility, inflation, and policy uncertainty. Two Nigerian startups alone, open banking platform Okra and digital lender Lidya, accounted for more than $32.9 million of the capital wiped out in 2025.
Okra, which had raised $16.5 million, shut down after refunding investors, while Lidya, which raised $16.4 million, ceased operations amid severe financial distress in its lending business.
Other Nigerian casualties included edtech startup Edukoya, which raised $3.5 million before closing after three years, Bento, which raised $3.1 million before halting operations under backlog and viability pressures, MEDSAF, which raised $2 million to digitise pharmaceutical supply chains, and Joovlin, which shut down after raising $100,000 and struggling for four years to secure sustainable funding. Collectively, these closures highlight how diverse sectors, from fintech and edtech to healthtech and logistics, were not immune to the downturn.
Beyond Nigeria, the shutdowns spanned key African tech hubs. In Kenya, buy-now-pay-later startup Lipa Later entered administration after raising $1.66 million, while Raise, which raised $460,000, shut down as customers migrated to better-capitalised competitors.
Remittance fintech Bonto also closed two years after launch, while PayU exited the Kenyan market after the central bank revoked its licence.
In South Africa, crypto and fintech startup Momint, which raised $5.3 million, shut down amid funding and market challenges, while agritech firm Inseco, which raised $1.66 million, struggled under power crises and operational pressures.
Egypt’s TradeHub closed after raising $1.4 million and returned remaining capital to investors, while Afristay shut down its accommodation booking platform after failing to scale profitably.
The shutdown list also included notable corporate exits rather than pure startup failures. Shoprite exited Ghana and Malawi to refocus on its core South African market, while Uber pulled out of Côte d’Ivoire after determining that cash-flow pressures outweighed brand strength in the market. These exits reinforced a broader theme of retrenchment and prioritisation across Africa’s consumer-facing digital economy.
Despite the headline-grabbing closures, the broader African tech ecosystem showed signs of maturation rather than collapse. Total funding rebounded to an estimated $3billion to $3.4 billion in 2025 across hundreds of deals, aided by fewer mega-round distortions and a shift toward later-stage, revenue-generating companies.
Layoffs declined compared to the peak of the downturn in 2023 and 2024, while merger and acquisition activity hit record levels as stronger firms acquired distressed assets, talent, and technology at discounted valuations.
Investors increasingly adopted a flight to quality approach, favouring startups with clear paths to profitability, strong governance, and exposure to resilient sectors such as enterprise software, infrastructure, climate tech, and regulated fintech.
Read also: What powered Africa’s startup funding recovery in 2025
By contrast, consumer-heavy models reliant on subsidies, rapid expansion, and foreign-denominated funding struggled to adapt to high-interest rates, currency devaluation, and rising operating costs.
The 2025 shutdown wave, while painful, represents a necessary clearing of excess built during Africa’s venture capital boom years between 2019 and 2021.
Jide Awe, tech analyst told BusinessDay that many of the failed startups were designed for hypergrowth in low-friction environments, a mismatch for African markets where infrastructure gaps, regulatory complexity, and lower purchasing power demand capital efficiency and local adaptation.
As the ecosystem heads into 2026, Awe said the lesson from the $52 million wiped out in 2025 is increasingly clear, in that, capital alone is no longer a moat.
“Survival in Africa’s tech landscape now hinges on disciplined execution, realistic growth expectations, and business models capable of generating sustainable profits in some of the world’s most challenging operating environments,” he added.
