Africa’s venture capital freeze thaws as mega deals revive funding

Seth Onyango, Bird Story Agency…

Africa’s startup scene shows signs of renewed investor optimism as funding activity in 2025 begins to reflect the pre-pandemic venture capital bonanza.

New figures from startup tracker Africa: The Big Deal show the continent is beginning to shake off a prolonged global “funding winter” that has shadowed the ecosystem since COVID-19 hit.

Last month alone, startups across Africa secured US$343 million in deals exceeding US$100k, making it the second-best April on record, trailing only the funding surge of April 2022.

Compared to the same month last year, the upswing is dramatic, with investment inflows swelling 4.5-fold from April 2024, reflecting cautious yet growing confidence among investors.

Analysts at the Deal describe the uptick as more than a fleeting spike, exuding confidence that new capital inflows signal renewed faith in African startups’ long-term prospects.

“This is the kind of momentum we like to see in the ecosystem,” noted the firm in its latest report. “Not just more money, but more breadth.”

Large-ticket deals helped propel April’s recovery, with South African healthtech hearX securing US$100 million through a merger with U.S.-based Eargo, marking 2025’s first mega-deal.

In Egypt, Islamic fintech Bokra raised US$59 million via a sukuk issuance—an impressive leap from its US$4.6 million pre-seed round in 2024.

Meanwhile, South African payments infrastructure firm Stitch secured US$55 million from existing investors to expand its end-to-end payment solutions.

Exits also remained active, especially among fintechs. For instance, Egypt’s fintech startup ADVA was acquired by UAE-based Maseera, Nigerian investment firm C-One Ventures took over Bankly, and South Africa’s Peach Payments acquired PayDunya to expand into Francophone West Africa.

Between January and April this year, African startups raised US$803 million across 163 deals — a 43% jump from the US$563 million recorded during the same period last year. For all its strides, though, Africa’s venture activity remains a fraction of its global peers.

Still, the number of funded startups also grew, rising from 147 in early 2024 to 163 this year.

Notably, at least 225 unique investors have taken part in deals over US$100,000 so far in 2025, underscoring the breadth of market engagement.

In January this year, the African Federation of Business Angels Networks (AFBAN), Secretary General Fady Ismaeel, forecast that angel investors will begin to capitalise on opportunities by tapping into key sectors that will drive the growth of the ecosystem.

“Africa’s startup ecosystem is expected to flourish, driven by innovation, demographic trends, and the continent’s growing digital economy,” said Ismaeel on a LinkedIn post.

In his projections, he cites innovation across fintech, health tech, agritech, renewable energy, and e-commerce among key growth drivers.

“Angel investors seeking opportunities in this vibrant market should consider key sectors poised for substantial growth while navigating the unique challenges of the African business environment,” he said.

African startups have begun to show signs of recovery in late October 2024, after fintech company Moniepoint successfully closed a Series C funding round, raising US$110 million that catapulted it to a unicorn status- a private company with a valuation of US$1 billion or more. Two years prior, the company was valued at just over US$800 million.

In mid-December 2024, Tyme Group, a South African fintech, secured US$250 million in a Series D funding round, increasing its valuation to US$1.5 billion.

Only MNT-Halan had achieved unicorn status earlier in 2023, three years after five start-ups reached this milestone at the end of 2021.

Analysts from Africa: The Big Deal noted that the stories of Moniepoint and Tyme highlight the significant impact that large funding rounds can have on startup funding dynamics.

“These two back-to-back announcements somehow cocked a snoot at those arguing the start-up ecosystem on the continent was moribund,” said the analysts.

Meanwhile, the resilience of Africa’s tech sector is also fostering a more diverse investment base.

Where previously funding was predominantly sourced from Western venture capitalists, there is now a growing interest from Middle Eastern and Asian investors, further diversifying the financial landscape and providing more funding avenues for startups.