African startups recorded $3.8 billion in funding in 2025, up 32% from 2024, according to Briter’s Africa Investment Report 2025. The recovery was uneven. Capital flowed mainly to a small group of markets and a small number of large rounds. Nigeria recorded its lowest share of funding among Africa’s four largest startup hubs. Startups in the country accounted for 8% of total disclosed funding in 2025, behind South Africa (32%), Kenya (29%) and Egypt (15%). It was Nigeria’s weakest share since 2019, a shift for a market that previously led Africa by deal value. The fall came even as Nigeria posted the highest number of deals on the continent. That split, high deal volume but low share of capital, suggests a market where company formation and early stage fundraising remain active, while growth stage funding has become harder to secure. Briter’s report shows that cheque sizes increasingly skewed toward fewer, larger rounds, which shaped outcomes. In 2025, fewer than 5% of deals exceeded $50 million, yet those deals accounted for about half of disclosed funding. This concentration helped shape outcomes in markets that attracted late stage capital, while countries with more early stage rounds saw smaller totals despite high activity. Only a handful of large Nigerian rounds stood out in 2025 with Moniepoint’s $90 million Series C extension one of the country’s biggest disclosed deals. Kenya and South Africa, by comparison, benefited from more growth stage capital landing in fewer companies. Egypt continued to attract sizeable rounds, including in capital intensive sectors that tend to draw larger cheques. The report linked Nigeria’s weaker share to market conditions as well as investor preference pointing to macroeconomic pressures, currency volatility, and reduced foreign investor exposure as factors that have dampened large equity investments in Nigeria over recent years. Nigeria’s relative share has declined since 2021, even as deal activity remained high. By sector, fintech and digital financial services remained the most funded category in 2025 by both value and deal count, maintaining a long running trend across the continent. This is closely followed by climate focused solutions raising more than three times their 2024 total, with solar energy leading funding activity. Much of that climate capital went to markets seen as offering clearer infrastructure pathways and more predictable returns, including South Africa and Kenya. Investor attention to artificial intelligence also increased, despite that funding was concentrated in applied products rather than deep research and development. The report also highlighted a shift in how startups financed growth. Debt financing crossed $1 billion for the first time, overtaking equity as some scaled startups relied more on loans, structured facilities and other non-dilutive instruments. This move reflects a preference for revenue strength, asset backing and predictable cash flows, rather than aggressive expansion. Exit activity subsequently reached an all-time with over 63 acquisitions recorded in 2025. More than half involved corporate buyers rather than other startups or private equity firms. Although most deals values were not disclosed, but the volume points to a market where acquisitions are becoming a more common path to scale. Foreign investors remained the main source of venture funding, led by the United States and Europe. The pool is gradually widening, with more inflows from Asia and the Gulf, alongside a stronger base of Africa focused investors providing steadier capital. For Nigeria, the picture is mixed. Even as it continues producing more start-ups and closing deals than any other market, the funding decline suggests fewer companies are reaching the stage where they can attract large rounds, or investors are choosing to place growth capital elsewhere.
