African tech startups raised $1b from January to May 2025
African startups raised US$1 billion in funding between January and May 2025.
This marks a 40% increase from the same period in 2024.
January saw strong performance with US$289 million.
However, funding dropped significantly in February and March, totaling US$119 million and US$50 million, respectively.
Funding rebounded in April, reaching US$343 million, while May saw a decline to US$254 million across 39 disclosed deals.
Egypt emerged as the top destination for startup funding in Africa, attracting US$330 million, which is 31% of the total.
.source-ref{font-size:0.85em;color:#666;display:block;margin-top:1em;}a.ask-tia-citation-link:hover{color:#11628d !important;background:#e9f6f5 !important;border-color:#11628d !important;text-decoration:none !important;}@media only screen and (min-width:768px){a.ask-tia-citation-link{font-size:11px !important;}}🔗 Source: Techpoint Africa
Egypt’s emergence as Africa’s top funding destination in 2025 represents a significant power shift in the continent’s tech landscape.
The country’s 130% funding growth compared to 2024 has been fueled by major deals like Nawy’s $75 million and MNT-Halan’s $50 million rounds, with Egyptian startups claiming six of the seven largest funding rounds in May 2025 alone 1.
This continues a pattern first visible in early 2023, when Egypt secured $492.7 million in Q1, nearly double South Africa’s $254.2 million during the same period 2.
Egypt’s ascendance has been enabled by its growing ecosystem depth, with MNT-Halan becoming the country’s first unicorn in 2023 through a $400 million funding round that strengthened the nation’s reputation among international investors 3.
This geographical shift demonstrates how quickly funding hotspots can change in Africa, with Kenya, previously leading funding earlier in 2025, now experiencing a notable decline in major deals, highlighting the competitive and dynamic nature of the continental ecosystem.
The month-to-month fluctuations in African startup funding throughout 2025 reflect a maturing investment landscape characterized by more sophisticated funding approaches.
The original $1 billion milestone includes diverse financing mechanisms, exemplified by Nawy’s blended $52 million Series A plus $23 million debt financing, signaling a growing sophistication in how African startups structure their capital 1.
This evolution aligns with continental trends, as venture debt has emerged as an increasingly preferred funding mechanism, with African startups raising over $250 million in debt financing during Q1 2023 alone 2.
Investors are demonstrating more disciplined approaches, with funding patterns showing a shift toward “smaller, more intentional investments” focused on startups with solid fundamentals rather than pure growth metrics 4.
The use of alternative structures like MNT-Halan’s $49.4 million bond issue in May 2025 further illustrates how the ecosystem is moving beyond traditional equity funding to embrace more complex financial instruments that better match business models and growth stages 1.
While fintech maintains its dominance, accounting for 65% of total funding in early 2023 and continuing strong performance in 2025, Africa’s startup ecosystem is experiencing meaningful sectoral diversification 2.
Climate tech funding has increased significantly, with the sector raising $325 million in 2024, reflecting global sustainability priorities and Africa’s unique position to develop innovative environmental solutions 4.
Healthcare and agriculture technology are emerging as critical growth sectors, addressing fundamental challenges while attracting substantial investment, as demonstrated by South African health-tech company AURA’s $15 million Series B round in May 2025 1.
This diversification is supported by Africa’s demographic advantages, including a young population (60% under 25) and rapidly growing mobile connectivity (800 million subscribers with 73% penetration), creating fertile ground for innovation across multiple sectors beyond financial services 5.
The expansion beyond fintech represents a healthy maturation of the ecosystem, with entrepreneurs tackling a broader range of the continent’s most pressing challenges while investors increasingly recognize opportunities in previously underfunded sectors.
……Read full article on Tech in Asia
Business Africa Investment
Comments
Leave a comment in Nestia App