African Startup Funding Rebounds to $3.2B

## What's New

African startups raised **$3.2 billion in 2025**, a 40% increase from 2024, reversing two consecutive years of decline. The surge was driven by mega-deals in energy and fintech, with M&A activity hitting a record 67 deals.

Why It Matters

The funding rebound signals renewed investor confidence after a brutal correction period. But the nature of deals has shifted—acquisitions, not fundraising, are now defining growth strategies. Companies are consolidating rather than competing for shrinking capital pools.

The Details

**Funding breakdown:** - Equity financing: $2.3B - Debt: $1.08B - Grants: $40M

**Top sectors:** - Fintech: $1.37B (40% of total) - Energy/Climate: Led half of all mega-deals - Healthcare and agritech followed

**Geographic distribution:** - Kenya: $879M (led the continent) - South Africa: $848M - Egypt: $561M - Nigeria: $186M

The Big Four (Kenya, South Africa, Egypt, Nigeria) still captured 78-84% of funding, but secondary markets like Senegal, Rwanda, and Morocco showed momentum.

**M&A surge:** 67 acquisitions in 2025—up 72% from 2024 and exceeding the previous record of 40 deals in 2022. Fintechs accounted for 46% of all acquisitions.

Notable Deals

• **Moniepoint** received regulatory approval to acquire Sumac Microfinance Bank (Kenya) and Bancom Europe Ltd (UK)
• **Twiga Foods** acquired three distributors to strengthen supply chain
• **d.light, Sun King, M-Kopa** attracted major backing in energy access

Sources

• [TechCabal: Africa's M&A surge signals new phase](https://techcabal.com/2026/01/23/why-buyouts-are-replacing-funding-rounds-in-african-tech/)
• [BusinessDay: Mega-deals propel funding to $3.2bn](https://businessday.ng/technology/article/mega-deals-drive-up-african-startup-funding-40-to-3-2bn/)
• [Ecofin Agency: M&A hits record 67 deals](https://www.ecofinagency.com/news/3001-52458-african-startup-m-a-hits-record-67-deals-in-2025-led-by-fintech)