Joy Agwunobi
African startups kicked off 2025 on a strong note, securing a total of $289 million in funding deals of $100,000 and above in January, according to a recent report by Africa: The Big Deal.
This represents a 240 per cent increase from the $85 million raised in January 2024, making January 2025 the second-highest month for startup funding since at least 2019, coming only behind January 2022, when funding reached record levels.
The report highlighted that equity financing accounted for the bulk of the funds raised, contributing over 90 per cent ($262 million) of the total amount. This marked a sharp rise from January 2024 and positioned it as the second-largest January for equity fundraising in the past six years.
According to the report, a significant portion of the funding came from four major deals, which collectively made up nearly 60 percent of the total amount raised. These deals originated from Africa’s leading startup hubs—Nigeria, Kenya, Egypt, and South Africa, with three of the four startups involved expanding their reach beyond Africa, reflecting a growing trend of African companies broadening their operations to international markets.
The report listed the top deals in January 2025 as follows:
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PowerGen (Energy): The renewable energy company raised over $50 million to develop a scalable platform for distributed renewable energy solutions across Africa, reflecting rising investor interest in sustainable energy.
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LemFi (Fintech): The financial technology firm secured $53 million to support its expansion into Asia and Europe, underscoring the increasing global appeal of African fintech solutions, particularly in remittances and cross-border payments.
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Naked (Insurtech): South Africa-based insurtech startup Naked raised $38 million in a Series B round to enhance automation and broaden its product offerings, signaling continued growth in the sector as technology reshapes traditional insurance services.
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Enko Education: The education-focused startup secured $24 million to expand its network of schools across Africa, highlighting investor interest in addressing educational gaps through innovative models.
The strong fundraising activity in January 2025 suggests renewed confidence in Africa’s startup ecosystem, which had struggled with funding constraints in 2023 and 2024. The growing diversity of sectors attracting investment ranging from energy and fintech to insurtech and education also reflects shifts in the continent’s economic landscape.
In 2024, African startups raised a total of $2.2 billion, largely boosted by major deals from Nigeria’s Moniepoint and South Africa’s Tyme Group. This amount included funds from equity, debt, and grants. However, despite the large sum, it was still 25 per cent lower than the $2.9 billion raised in 2023.
