Nigeria has slipped to fourth place in African startup funding for the first half of 2025, as South Africa reclaimed its position as the continent’s top investment destination, raising a record $344 million, according to a new report by Africa: The Big Deal.
The six-month analysis revealed that South Africa accounted for 24% of the total $1.4 billion raised across the continent, driven by three major deals: hearX ($100 million), fintech firm Stitch ($55 million Series B), and Naked ($38 million Series B2). With 26 startups securing $1 million or more, South Africa outpaced its closest rivals, signaling renewed investor confidence in its startup ecosystem.
Egypt followed closely with $339 million, its strongest half-year performance since 2023. The North African country matched Nigeria in the number of startups raising at least $100,000 (42 deals) and $1 million (21 deals). Half of Egypt’s funding came from three big-ticket transactions: MNT-Halan’s $50 million bond, Bokra’s $59 million sukuk issuance, and Nawy’s $75 million proptech deal, the largest in Africa’s property technology sector.
Kenya, once Africa’s startup darling, experienced a sharp decline, securing $227 million, its lowest since H1 2021. The East African powerhouse recorded just 30 deals above $100k and 16 deals above $1 million, with major funding concentrated in energy projects, including Burn Manufacturing ($85 million) and PowerGen ($55 million).
Nigeria, Africa’s most populous nation and once the preferred destination for venture capitalists, recorded its weakest half-year since H2 2020, raising just $176 million. Despite its lower funding volume, Nigeria matched Egypt in the number of startups raising at least $100k and $1 million, reflecting a wide but shallow spread of capital across ventures.
The country’s top deals included:
LemFi ($53 million Series B)
OmniRetail ($20 million Series A)
Arnergy ($18 million Series B)
Analysts attribute Nigeria’s underperformance to persistent foreign exchange volatility, regulatory uncertainties, and investor cautiousness in the wake of recent macroeconomic reforms.
However, the report hinted at a potential rebound, citing pending mega deals such as a $100 million round for PalmPay and Moove’s planned $300 million equity and $1.2 billion debt package, which could propel Nigeria back into the top three by year-end.
Beyond Africa’s “Big Four” (South Africa, Egypt, Kenya, and Nigeria), Senegal stood out, crossing the $100 million mark largely due to Wave Money’s $137 million debt deal. Other noteworthy transactions were recorded in GoZem (Togo), Zeepay (Ghana), and Djamo (Côte d’Ivoire).
The report also highlighted Ghana as the most active market outside the top four, with 14 startups raising at least $100k. Encouraging funding activity was also recorded in Morocco, Tunisia, Uganda, and Tanzania, although 33 African markets reported no deals above $100k in the period under review.
The reshuffling of Africa’s startup funding hierarchy—South Africa, Egypt, Kenya, and Nigeria—is the first of its kind since 2020, reversing Nigeria and Kenya’s dominance between 2021 and 2024. Industry experts believe regulatory clarity, increased local investor participation, and macroeconomic stability will be critical for Nigeria and Kenya to regain investor confidence.
As African startups prepare for the second half of 2025, attention will focus on whether pending mega deals in fintech, energy, and proptech will push total funding beyond 2024’s full-year record.