Africa’s start-up funding showed a slowdown in 2025, with investors increasingly concentrating capital at the seed and early stages amid rising market uncertainty. According to the African Private Capital Association (AVCA), venture capital activity in the nine months to September 30, 2025, was heavily focused on early growth phases, while late-stage activity was extremely limited, recording only two deals—the lowest since 2020. The report describes the market as “bottom-heavy,” reflecting renewed interest at the entry level but a scarcity of capital for scale-ups seeking large funding rounds.
Despite this uneven landscape, early-stage investment demonstrated resilience. The seed segment grew by 14 percent to 107 deals, accounting for 85 percent of all deals recorded in 2024. However, the disclosed value of these deals fell to $218 million from $558 million, and a rising share of deals—15 percent—were undisclosed, reflecting investors’ caution and less transparency in a climate of uncertainty. Overall, total deal count remained broadly flat at 43, while capital deployed tripled to $600 million.
Large-scale funding rounds were scarce, with only 13 deals above $20 million totaling just over $500 million, marking the weakest five-year aggregate. Regionally, South Africa benefited from a relatively stable investment climate, hosting more than a third of these large deals. West Africa remained the most active in terms of deal volume, driven largely by Nigerian Series A funding, while North Africa accounted for 23 percent of both deal volume and value, with Egypt and Morocco contributing nearly three-quarters of the region’s total. East Africa maintained steady deal flow, but equity inflows contracted sharply as investors shifted toward debt instruments in sectors like financial services, transport, and clean energy.
Venture debt emerged as a key buffer during the equity slowdown, with deals rising 31 percent to 55 and total value more than doubling to $1.6 billion, surpassing 2024’s full-year total. Six megadeals contributed $1.1 billion, including Sun King’s $156 million securitisation in Kenya and Wave’s $137 million debt raise in Senegal. East Africa led in venture debt activity, with Kenya alone accounting for 22 percent of all deals, highlighting the growing importance of debt as a driver of liquidity and growth across the continent.
Overall, combined venture capital and venture debt deployments reached $3 billion across 417 deals, up from $2.2 billion across 361 deals in 2024. Investor focus within financial services shifted from the digital banking boom of 2024 to fintech infrastructure, including payments platforms, buy-now-pay-later services, and personal credit, exemplified by Sevi in Kenya, Leya in Côte d’Ivoire, and ValU in Egypt. These trends point to a reshaped funding landscape in Africa, where early-stage equity dominates, debt plays a critical role in sustaining growth, and high-value scale-up funding remains scarce.
