Joy Agwunobi
A recent report by Africa: The Big Deal revealed that in March 2025, African startups experienced a significant funding decline, raising only $50 million. This figure marks one of the lowest monthly totals since late 2020.
This slowdown follows a promising start to the year, with January seeing nearly $300 million in funding and February attracting $119 million. The disappointing March figures dragged the total funding for the first quarter of 2025 to $460 million, reflecting a 5 per cent decline from the $486 million raised in the same period last year.
The report noted that Kenya, Nigeria, and South Africa continued to dominate as the top investment hubs, collectively attracting around $100 million each, representing 24 per cent , 24 per cent , and 22 per cent of the total funding, respectively, Egypt followed with $61 million, with 14 per cent of the total. Togo completed the top five list with Gozem’s $30 million Series B funding round.
According to the report, almost half of the funding (46 per cent) was raised by fintech startups $53 million for LemFi, $38 million for Naked, amongst others, followed as usual by energy (18 per cent) and logistics and transportation (10 per cent).
In terms of gender representation, female-led startups received a mere 2 per cent of the total funding in Q1, amounting to $10 million. This figure was primarily influenced by a $6.2 million grant to the South African biotech firm Biologics. Excluding grants, the percentage of funding directed toward female-led ventures dropped to just 0.7 per cent .
Male-only founding teams dominated the funding landscape, capturing 79 per cent of investments, while female-only teams received only 1 per cent . Mixed-gender teams saw a slight improvement, accounting for 20 per cent of the total, compared to previous quarters.
Despite the overall decline in funding, the number of startups raising at least $1 million remained steady at 52, consistent with the 2023-2024 average. The report notes, “Q1 wasn’t the best quarter overall, but it’s not all doom and gloom if we zoom out and consider longer-term trends.”
However, the sluggish Q1 has raised concerns about the ability of African startups to regain momentum after a challenging 2024. Last year, African startups raised $2.2 billion, largely driven by two significant deals—Moniepoint from Nigeria and South Africa’s Tyme Group.
This total represented a 25 per cent decline compared to the $2.9 billion raised in 2023. In 2024, 188 startups secured $1 million or more, a 10 per cent decrease from the previous year. While fintech continues to be the leading sector, the absence of major deals like those secured by Moniepoint and Tyme in 2024 further fuels concerns about the funding outlook for 2025.
