African startups experienced a significant funding decline in March 2025, raising only $50 million.
This marks one of the lowest monthly totals since late 2020, according to a report by Africa: The Big Deal.
The slowdown follows a strong start to the year, with January recording almost $300 million in funding and February securing $119 million.
The poor March performance dragged the first−quarter total to $460 million, a 5% drop from the $486 million raised in Q1 2024.
Big four countries and fintech dominate funding
Kenya, Nigeria, and South Africa remained the top investment destinations, each attracting roughly $100 million, representing 24%, 24% and 22% of the total respectively, followed by Egypt ($61 million, 14%).
- Togo completed the top five, thanks to Gozem’s $30 million Series B funding round.
- According to the report, almost half of the funding (46%) was raised by fintech startups ($53 million for LemFi, $38 million for Naked etc.), followed as usual by energy (18%) and logistics & transportation (10%).
Gender funding gap remains wide
The report shows that female-led startups received just 2%, that is, $10 million of the total Q1 funding, heavily influenced by a $6.2 million grant to South African biotech firm Biologics.
- Excluding grants, the share of funding going to female CEOs fell to a mere 0.7%. Male-only founding teams dominated, securing 79% of investments, while female-only teams received just 1%.
- Mixed-gender founding teams accounted for 20%, showing slight improvement compared to previous quarters.
- While overall funding declined, the number of startups raising at least $1 million in Q1 remained stable at 52, in line with the 2023−2024 average.
“Q1 wasn’t the best quarter overall, but it’s not all doom and gloom if we zoom back and look at longer-term trends”, the report noted.
What you should know
The sluggish Q1 raises concerns about whether African startups can regain momentum after a tough 2024.
- African startups cumulatively raised a total of $2.2 billion in 2024, driven by two mega deals by Nigeria’s Moniepoint and South Africa’s Tyme Group.
- The amount secured in 2024 represented a 25% drop in funding compared to the $2.9 billion raised on the continent in 2023.
- In the year, a total of 188 ventures raised $1 million or more, which was about 10% less than what was recorded in 2023.
While fintech remains the dominant sector, the lack of large deals like the big tickets secured by the likes of Moniepoint and Tyme last year heightens the concern for 2025.
