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Africa’s venture capital scene is undergoing a major transformation in 2025, with Nairobi and Johannesburg emerging as the continent’s new powerhouses. Once dominated by West African giants like Lagos, the investment spotlight is now firmly on East and Southern Africa—driven by a surge in cleantech and fintech funding.
According to the Africa Venture Pulse – State of Investment 2025, East Africa has raised over USD 865 million across more than 100 deals by August, narrowly ahead of Southern Africa’s USD 845 million. In a surprising shift, West Africa has slipped to third place, with USD420 million, while North Africa, anchored by Egypt, has remained steady at USD 450 million.
Overall, African startups have raised over USD 2 billion from 500 deals so far in 2025—doubling the investment volume recorded during the same period in 2024. However, this growth hasn’t come from more deals, but from bigger checks. The median deal size has rebounded to US$1 million, a level last seen in 2022.
“2025 marks a recovery in total funding after two consecutive years of decline, even as the number of deals remains flat,” the report notes—reflecting shifts in both investor behavior and startup maturity. Fintech remains the king of African venture funding, pulling in over USD 1 billion across 115 deals, especially in the areas of payments and money transfers. But a powerful challenger has emerged—cleantech—which has already raised nearly USD 950 million, much of it through debt financing.
Kenya has become the continent’s cleantech capital, with solar energy giants Sun King and d.light among the top beneficiaries. These capital-intensive ventures are signaling a deeper trend: investors are increasingly backing scalable, impact-driven businesses.
Other sectors have seen more modest investment inflows:
- Healthtech: USD 150 million
- Mobility: USD 100 million
- Proptech (Property Tech): USD 75 million
Interestingly, education and agriculture tech—though attracting less money—remain hotbeds of deal activity, with 65 and 50 deals respectively. This points to sustained interest in early-stage solutions tackling fundamental needs across the continent.
One of the most significant shifts in 2025 has been the surge in debt financing, which has exceeded USD 1 billion for the first time. While equity rounds remain essential, there’s a noticeable pivot toward supporting established startups with proven track records. In contrast, early-stage seed deals under US$250,000 have dropped sharply, from 90 in 2022 to just 21 in 2025. This decline reflects a reduced appetite for high-risk, early-stage investments, particularly among accelerators and angel investors.
Despite growing awareness of the need for diversity in tech, male-led startups still dominate, capturing 75% of all funding. While this is a slight improvement from previous years, female-led and mixed-gender teams still face significant challenges in accessing capital. Efforts toward gender parity are underway, but progress remains slow and uneven.
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https://trendsnafrica.com/nairobi-business-venture-plc-reports-profit-of-ksh-32-2-million/
The African VC ecosystem in 2025 is entering a new era of maturity and growth. With larger deal sizes, a focus on sustainable business models, and a geographical shift toward Nairobi and Johannesburg, the continent is diversifying and deepening its innovation capacity. While challenges remain—particularly around early-stage funding and gender equity—the foundations are being laid for sustained innovation and global relevance. Cleantech and fintech are leading the charge, but the real story is one of ecosystem evolution. Africa’s VC race is no longer about who gets the most deals—it’s about who builds the future.
