Investments in African startups reached a record-breaking $1.4 billion during the initial half of 2025
Africa's Startup Ecosystem Thrives in H1 2025, Led by Fintech and Debt Deals
In the first half of 2025, Africa's startup ecosystem witnessed a significant surge in funding, with total investments approximating $1.4 billion. This represents a 78% increase compared to the same period last year.
Healthcare was buoyed by a landmark deal, accounting for 11% of total funding, while fintech, logistics, and mobility sectors dominated startups funding, capturing approximately 45%, 14%, and 11% respectively. This rebound in fintech investments maintains its historical peak investment share.
The growing role of debt is hinted at in these deals, with about $400 million coming from debt financing. Notable debt raises include Wave Money’s $137 million debt round, led by Rand Merchant Bank and supported by development finance institutions.
South Africa led the pack with $344 million, powered by deals like hearX's $100M merger and Stitch's $55M Series B. Despite Nigeria's historically strong funding position, it dropped to fourth place for the first time since 2020, raising $176 million.
Investor participation remains muted, with only about 330 investors backing deals in H1 2025, up slightly from last year. However, the average investment size has increased, with the six-month average for H1 2025 standing at $237 million, compared to just $133 million in H1 2024.
The mid-market, especially growth-stage startups looking for $10M-$50M rounds, remains underserved in H1 2025. On the other hand, H1 2025 saw 39 deals worth $10 million or more, the most in two years.
Proptech showed rare strength with Nawy's $75M raise in H1 2025. Climate tech also captured 21% of total funding and nearly a third of $100k+ deals, marking a significant shift towards sustainable investments.
Despite the activity, funding remains concentrated in a few key countries, sectors, and deal structures. Not all markets are sharing in the upswing, and June 2025 was the best single month since 2022, with $365 million raised.
There were 21 exits in H1 2025, nearly matching the combined total of 2023 (20) and 2024 (22). The trend indicates a growing maturity in Africa's startup ecosystem, with more companies reaching exit stages.
In conclusion, Africa's startup ecosystem is experiencing a resurgence, with fintech, debt deals, and a few key countries driving the growth. However, the mid-market and less developed markets still require attention to ensure continued and equitable growth.
In the dynamic landscape of Africa's startup ecosystem, technology plays a pivotal role in driving growth, especially in the fintech sector. This is exemplified by the notable debt raise of Wave Money, amounting to $137 million, which was led by Rand Merchant Bank and supported by development finance institutions.
Moreover, the growing importance of technology in business can also be seen in the increasing participation of investors in investing in startups, with the average investment size seen a significant increase to $237 million in H1 2025 compared to $133 million in H1 2024.
