Startups across Africa raised a total of $2.8 billion in funding in the first eight months of 2025 (January to August), according to the African Venture Pulse - Current State of Investment 2025 report by Briter. While this marks a substantial volume of activity, it represents a 28% year-on-year decline compared to the $3.9 billion raised in the same period in 2023.
The report highlights key trends shaping the continent’s startup ecosystem, including a slowdown in deal activity. In total, over 750 funding deals were recorded, down from more than 930 in 2023. Despite this dip, the African startup landscape continues to evolve, with shifts in investment type, sector focus and funding demographics.
Debt Financing in Africa Surges Past $1 Billion First Time
One of the notable developments has been the rise of debt financing, which surpassed $1 billion for the first time. This form of funding is increasingly being used by startups to scale without significant equity dilution, reflecting growing investor confidence in asset-backed and revenue-generating models.
In terms of sectors, fintech continues to dominate in both deal volume and capital raised. However, cleantech (or greentech) is gaining traction, attracting close to $1 billion in funding, a significant leap that underlines investor appetite for sustainable innovation across Africa.
Early-Stage Deals Dominate, Gender Funding Gap Widens
According to Briter’s report, African startups have attracted more early-stage funding in 2025, while growth-stage deals have declined. This could be a result of tighter global capital markets, where investors are choosing to bet on promising young ventures with lower capital requirements and higher risk-adjusted potential.
However, the report also highlights a persistent gender gap in startup funding. Around 75% of all capital went to male-led teams, while only 14% of funding this year has gone to women-only teams. This imbalance underscores the need for more gender-inclusive funding initiatives and policies.
A diverse range of funders continue to support Africa’s entrepreneurial ecosystem. While venture capital firms (VCs) accounted for the largest share of funding at 33%, accelerators made a strong showing with 24% of deals, suggesting a growing appetite for nurturing early-stage startups.
Other funding sources include:
Private equity firms – 5%
Angel investors – 6%
Corporate investments – 10%
Impact investors – 15%
Others – 7%
Interestingly, the report notes a rise in non-traditional funders, including corporates, impact funds and private equity players, who are drawn by Africa’s large underserved markets and the potential for scalable impact.
The ‘Big Four’ Still Lead, but Other Markets Are Emerging
When it comes to regional distribution, the ‘Big Four’ markets - South Africa, Nigeria, Kenya and Egypt - continue to dominate the funding landscape:
South Africa led with $915 million raised across 55+ deals.
Nigeria followed with $540 million from 80+ deals.
Kenya secured over $500 million from more than 80 deals.
Egypt brought in $450 million across approximately 45 deals.
Beyond these hubs, several emerging markets showed signs of increased activity:
Rwanda attracted $165 million across more than 5 deals.
Benin raised $50 million.
Ghana recorded $45 million across 30+ deals.
Tanzania brought in $40 million through 10+ deals.
Fintech, Solar and EV Solutions Attract the Most Funding
Fintech remains the top-funded sector, particularly in digital payments and lending. However, solar energy and electric vehicle (EV) solutions are now among the most funded product categories, reflecting Africa’s growing clean energy ambitions.
Additionally, the report identifies a surge in startups leveraging asset-finance-backed business models, which allow companies to raise capital through the collateralisation of productive assets. This model has proven particularly attractive in capital-intensive sectors such as cleantech and mobility.
As Africa’s startup ecosystem matures, the funding landscape is clearly shifting, from equity-heavy rounds to diversified capital stacks, and from growth-stage dominance to early-stage experimentation. While the dip in overall funding may reflect global market corrections, the underlying signals remain optimistic: a rise in cleantech, increasing interest from non-traditional funders, and a maturing investor base.
For founders, this means recalibrating strategies to align with evolving investor priorities. For investors, it’s a critical moment to reassess risk, lean into emerging markets, and back inclusive, scalable innovation on the continent.
Lungile is the Digital Editor for Startup.Africa, with a knack for storytelling, technology and innovative ideas. Working with Startup.Africa, she takes simple ideas and turns them into amazing stories.
Lungile Msomi
Lungile Msomi
