African Startups Raise $289M in January 2025, Marking a Strong Funding Rebound

In January 2025, African startups raised an impressive $289 million, representing a 240% increase compared to the same period in 2023. This marks a positive start to the year for the continent’s startup ecosystem, which had been struggling with funding challenges in the previous two years. January 2023 saw $85 million raised, the second-highest figure for any January since at least 2019, following the peak funding period of January 2022.

The funding landscape was dominated by equity financing, which accounted for over 90% of the total raised, totaling $262 million. This figure signifies a substantial increase compared to January 2024 and marks the second-highest amount for equity fundraising in the past six years. Major investments came from Nigeria, Kenya, Egypt, and South Africa, which together contributed around 60% of the total funds raised across Africa.

The four largest deals in January 2025 showcased diverse sectors and the growing ambition of African startups to expand beyond the continent. PowerGen, a renewable energy startup, secured over $50 million, while fintech company LemFi raised $53 million to expand into Asia and Europe. Insurtech firm Naked raised $38 million in a Series B funding round, and Enko Education secured $24 million for further expansion of its network of schools across Africa.

Experts believe the strong performance in January is indicative of a promising resurgence in the African startup scene, which had faced significant challenges in 2023 and 2024. The rise in funding, especially for startups with international expansion plans, points to a hopeful year ahead for African innovation and entrepreneurship.

Source: PUNCH