Funding into the African tech ecosystem dropped five percent to $460 million in the first quarter of 2025.
According to Africa: The Big Deal, the decline underscored the consistent drop in venture capital funding on the continent, which fell from $486 million raised in the same period of 2024,
The data insight firm, which tracks funding rounds of $100,000 and above, revealed that nearly $300 million was raised by start-ups in January, and fell to $119 million in February.
March saw one of the lowest monthly totals since late 2020, with just $50 million in funding announced. Despite a steady number of start-ups securing funding, the lack of deals exceeding $10 million significantly impacted overall investment figures.
“Q1 2025 is the second-lowest quarter in terms of start-up funding since late 2020,” the insight firm noted. “However, things are looking more positive if we focus on the number of start-ups that announced at least $1 million in funding during the quarter, with 52 such deals aligning with the 2023-2024 average.”
The report further disclosed that the lion’s share of the funding, 83 percent, went to the Big Four: Kenya, Nigeria, South Africa, and Egypt.
Kenya and Nigeria each attracted roughly $100 million in funding, followed closely by South Africa with $100 million. Egypt secured $61 million (14 percent), while Togo emerged as a surprise entry in the top five, buoyed by Gozem’s $30 million Series B funding round.
Fintech remained the dominant sector, accounting for nearly half (46 percent) of total investment, the report disclosed.
“Notable fintech deals included LemFi’s $53 million raise and Naked’s $38 million. The energy sector followed with an 18 percent share of the total funding, while logistics and transportation startups secured 10 percent,” Big Deal reported.
Despite ongoing conversations around gender inclusivity in venture capital, female-led start-ups continued to receive a disproportionately small share of funding.
“Just over 2 percent ($10 million) of Q1 funding went to female CEOs, with the largest such deal being a $6.2 million grant awarded to South African biotech firm African Biologics. Excluding grant funding, female-led start-ups accounted for a mere 0.7 percent of all investments,” it said.
In contrast, Big Deal added that 79 percent of total funding went to either solo male founders (11 percent) or all-male founding teams (67 percent). While diverse founding teams attracted 20 percent of the investment, this remains a modest improvement compared to previous quarters.
“Meanwhile, just 1 percent of funding was directed toward solo female founders or female-only teams,” the report said.
