Nairobi and Johannesburg are pulling ahead in Africa’s venture capital race, with Kenyan solar startups and South Africa’s fintechs attracting the bulk of fresh capital this year.
- •According to the Africa Venture Pulse – State of Investment 2025, East Africa has drawn more than US$865 million across over 100 deals through August, edging out Southern Africa’s US$845 million haul.
- •West Africa, long buoyed by Nigeria, has slipped to third place with US$420 million, while North Africa, which is anchored by Egypt, has remained steady at US$450 million.
- •By August this year, more than US$2 billion had been raised across 500 deals, already doubling the volume recorded over the same period in 2024.
- •The recovery comes not from more deals but from bigger checks, with the median deal size rising back to US$1 million, a level last seen in 2022.
“Looking at the ecosystem without the very large and very small deals that sometimes skew the data, 2025 marks a recovery in total funding after two consecutive years of decline, even as the number of deals remains flat,” the report stated.
Fintech remains the most funded industry, pulling in more than US$1 billion across 115 transactions, led by payments and transfer platforms.
Meanwhile, cleantech has mounted a strong challenge, raising nearly US$950 million, primarily through debt financing for asset-heavy solar ventures. Kenya’s Sun King and d.light were among the biggest beneficiaries, cementing the country’s role as the region’s energy hub.
Other sectors that have attracted thinner slices of capital include Health tech (US$150 million), Mobility (US$100 million), and Property tech (US$75 million). Although Education and agriculture startups did not make it among those with higher fund volumes, they represented a good number of VC deals over the year, at 65 and 50 respectively.
Meanwhile, the shift in deal structures has been as pronounced as the geographic and sectoral changes. Debt financing crossed the US$1 billion mark for the first time, narrowing its gap with equity.
Traditional equity rounds are fewer, with investors preferring to back established firms with proven models. Deals under US$250,000, once common for accelerators and early-stage startups, have fallen from 90 in 2022 to just 21 this year.
On the parity frontier, Male-led startups have captured three-quarters of all funding, a slight improvement from previous years but still leaving women-led and mixed teams trailing.
More than 35 mergers and acquisitions have been recorded so far, including Meta’s purchase of Egypt’s PlayAI, the acquisition of Kenyan startup ‘Flitaa’, and Nedbank’s US$93 million acquisition of iKhokha in South Africa.
At the same time, six companies have shut down, including Nigeria’s ‘Okra’, ‘Bento’, and ‘Edukoya’ as well as Kenya’s ‘Lipa Later’.