African start-up funding hits four-year low in March amid economic uncertainty
Agency Report
African start-ups faced a significant funding decline in March 2025, raising only $50 million, marking one of the lowest monthly totals since late 2020, according to a report by Africa
The sharp downturn follows a strong start to the year, with January securing nearly $300 million and February bringing in $119 million.
However, the weak March performance dragged the first-quarter total to $460 million, reflecting a 5 per cent drop from the $486 million raised in the first quarter of 2024.
Despite the decline, Kenya, Nigeria, and South Africa remained the leading destinations for startup investments, each attracting approximately $100 million, accounting for 24 per cent, 24 per cent, and 22 per cent of the total, respectively.
Egypt followed with $61 million (14 per cent), while Togo rounded out the top five, largely due to Gozem’s $30 million Series B funding round.
As in previous quarters, fintech startups dominated, securing nearly 46% of total funding. This included major deals such as LemFi’s $53 million raise and Naked’s $38 million funding round.
The energy sector followed with 18 per cent, while logistics & transportation accounted for 10 per cent.
The funding disparity between male and female-led startups remains stark.
The report highlighted that female-led startups received just 2 per cent ($10 million) of total first quarter funding, with a $6.2 million grant to South African biotech firm Biologics contributing significantly to this amount.
Excluding grants, the share of funding for female CEOs plummeted to 0.7 per cent.
Male-only founding teams secured 79 per cent of total investments, while female-only teams received just 1 per cent. Mixed-gender teams accounted for 20 per cent, showing slight improvement compared to previous quarters.
Despite the overall funding decline, the number of startups raising at least $1 million in the first quarter remained stable at 52, aligning with the 2023–2024 average.
Industry experts acknowledge the slow quarter but remain cautiously optimistic about long-term trends.
“While quarter one wasn’t the best quarter overall, it’s not all doom and gloom if we zoom out and look at the broader picture,” Africa: The Big Deal stated in its report.
Tech investor Samuel Adeyemi, a partner at Lagos-based VC firm Innovate Africa, noted that while fintech remains dominant, the absence of mega deals—such as those secured by Moniepoint (Nigeria) and Tyme Group (South Africa) in 2024—has led to concerns about funding stability in 2025.
The sluggish first quarter performance raises concerns about whether African start-ups can regain momentum after a challenging 2024, when total funding fell 25 per cent from $2.9 billion in 2023 to $2.2 billion.
