A Promising Start to 2025: African Startups Raise USD 289M in January, Signaling Resilience and Growth

The African startup ecosystem has kicked off 2025 with a bang, showcasing remarkable resilience and growth despite global economic uncertainties. According to data from Africa: The Big Deal, startups across the continent raised a staggering 289 million in January 2025 through deals worth 100,000 or more (excluding exits).

This figure represents a nearly 3.5x increase compared to January 2024, when startups raised USD 85 million, and marks the second-best January for fundraising since at least 2019. Only January 2022, during the peak of the global funding boom, surpassed this performance.

This impressive start to the year underscores the growing confidence in Africa’s innovation potential, particularly as more than 90% of the funding (USD 262 million) came from equity investments. This is a 4.4x jump from January 2024 and, again, the second-highest January equity fundraising total since 2019.

A Closer Look at the Numbers

In January 2025, Africa: The Big Deal tracked 40 deals worth 100k or more. While this is fewer than the number of deals recorded in January 2022,2023, or 2024, the quality of deals has improved significantly. A total of 26 deals exceeded 100,000 or more. While this is fewer than the number of deals recorded in January 2022, 2023, or 2024, the quality of deals has improved significantly. 26 deals exceeded 1 million, up from 21 in January 2024, making it the second-best January for USD 1 million deals since 2019.

The top four deals alone accounted for nearly 60% of the total funding raised on the continent last month. Notably, all four originated from one of Africa’s “Big Four” markets—Nigeria, Kenya, Egypt, and South Africa—and three of the four involved expansions into new geographies, both within and beyond Africa.

1. PowerGen (Energy): Raised over USD 50 million to establish a scalable platform for distributed renewable energy solutions across Africa. This deal highlights the growing investor interest in sustainable energy solutions, which are critical to addressing Africa’s energy access challenges.

2. LemFi (Fintech): Secured USD 53 million to further expand its remittance and financial services into Asia and Europe. This reflects the increasing globalization of African fintech companies, which are leveraging their expertise to serve diaspora communities worldwide.

3. Naked (Insurtech): Bagged a USD 38 million Series B round to automate and expand its product offering. The insurtech sector continues to gain traction as startups innovate to make insurance more accessible and affordable for Africans.

4. Enko Education: Raised USD 24 million to continue expanding its network of schools across the continent. This deal underscores the importance of education-focused startups in addressing Africa’s growing demand for quality education.

What Does This Mean for Africa’s Startup Ecosystem?

The strong performance in January 2025 is a testament to the resilience and maturity of Africa’s startup ecosystem. Despite global macroeconomic challenges, investors remain bullish on the continent’s potential, particularly in sectors like fintech, energy, insurtech, and education.

The focus on geographic expansion is also noteworthy. African startups are no longer confined to their home markets; they are increasingly looking to scale across borders, both within Africa and internationally. This trend not only demonstrates the scalability of African innovations but also positions the continent as a key player in the global startup landscape.

Challenges and Opportunities Ahead

While the numbers are encouraging, it’s important to acknowledge the challenges that remain. Access to funding is still concentrated in a few markets, with the Big Four accounting for the lion’s share of investments. To unlock the full potential of Africa’s startup ecosystem, there needs to be a concerted effort to support entrepreneurs in underserved regions.

Additionally, the predominance of equity funding highlights the need for more diverse financing options, such as debt and grants, to cater to startups at different stages of growth.

Final Thoughts

January 2025 has set a positive tone for the year, signaling that Africa’s startup ecosystem is not only surviving but thriving. As Max Cuvelier of Africa: The Big Deal aptly notes, the data reflects a maturing ecosystem that is increasingly attracting global attention and investment.

For entrepreneurs, investors, and ecosystem enablers, this is a call to action to build on this momentum. By addressing existing gaps and fostering collaboration, Africa can cement its position as a hub of innovation and opportunity.

Inspired by insights from Max Cuvelier and the team at Africa: The Big Deal. For more in-depth analysis and access to the full database, visit Africa: The Big Deal.