Q1 2025: African Start-Ups Secure $460M Amid a Rocky March

Africa’s start-up ecosystem kicked off 2025 with a burst of promise, only to stumble as the first quarter unfolded. In total, start-ups across the continent raised $460 million through deals of $100K or more (excluding exits), a figure that reflects a 5% dip from Q1 2024’s $486 million. While January dazzled with nearly $300 million in funding, the momentum fizzled—February brought in $119 million, and March limped to a mere $50 million, one of the weakest monthly hauls since late 2020. Despite the lacklustre finish, Q1 2025 tells a story of resilience, tempered by familiar challenges.

A Tale of Three Months

January set a high bar, buoyed by optimism and hefty investments. February, though softer, still kept hopes alive. But March’s $50 million tally—no deals topped $10 million—dragged the quarter down, landing it as the second-lowest funding period since late 2020. Interestingly, the number of start-ups securing funds held steady, matching prior months. The real culprit? A drought of big-ticket deals, a stark contrast to January’s robust start.

The Big Four Dominate, Togo Surprises

As expected, the “Big Four”—Kenya, Nigeria, South Africa, and Egypt—gobbled up 83% of the funding pie. Kenya, Nigeria, and South Africa each pulled in roughly $100 million (24%, 24%, and 22% of the total, respectively), while Egypt nabbed $61 million (14%). Togo, an unexpected contender, rounded out the top five, thanks to Gozem’s $30 million Series B round—a rare bright spot in a quiet March. This concentration underscores the gravitational pull of established hubs, even in a subdued quarter.

Sector Spotlight: Fintech Leads, Energy and Logistics Follow

Fintech reigned supreme, claiming 46% of the quarter’s funds. Standout raises included LemFi’s $53 million and Naked’s $38 million, cementing the sector’s enduring appeal. Energy start-ups snagged 18%, reflecting a steady investor appetite for sustainable solutions, while logistics and transportation took 10%, buoyed by innovations like Gozem’s. These three sectors alone highlight where capital sees opportunity, even amid a funding slowdown.

Gender Gap Persists

The funding landscape for female-led start-ups remained starkly uneven. Just 2% of Q1’s total—$10 million—went to female CEOs, with South African biotech African Biologics securing the lion’s share via a $6.2 million grant. Strip out grants, and the figure plummets to 0.7%, a sobering reminder of persistent disparities. Male-only founding teams dominated with 67% of the funds, solo male founders took 11%, and mixed-gender teams managed 20%—a modest uptick from past quarters. Solo female founders or all-female teams? A scant 1%, underscoring a gap that refuses to close.

Silver Linings Amid the Slump

Q1 2025 wasn’t a banner quarter, but it’s not all grim. The 52 start-ups raising $1 million or more align with the 2023-2024 average, suggesting a stable base of activity despite the dollar drop. Compared to Q1 2024’s already muted performance, this year’s 5% decline feels less like a collapse and more like a plateau. Zoom out, and longer-term trends hint at resilience—fewer mega-deals, yes, but a steady hum of smaller investments keeps the ecosystem ticking.

Looking Ahead

March may have disappointed, but Q1 2025 offers lessons in endurance. The Big Four’s dominance, fintech’s lead, and the gender funding chasm are familiar refrains, yet the steady deal count signals life beneath the surface. What’s next? Our upcoming analysis will dig into the bigger picture—stay tuned for a deeper dive into where Africa’s start-up scene is headed.