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Africa's startups raised $254M in May 2025, Pushing Year-to-date VC funding past $1B 

Despite a global landscape often characterized by a cautious venture capital market, Africa’s vibrant startup ecosystem continues to demonstrate remarkable resilience. In May 2025, startups across the continent collectively secured a robust $254 million in funding. While this figure represents a slight dip from April’s impressive haul, it signifies a stronger performance compared to March and, more importantly, propels Africa’s year-to-date funding total past the $1 billion mark.

According to data from Africa: The Big Deal, this cumulative total for 2025 is a substantial 40% increase compared to the $750 million raised in the same period last year. Furthermore, the report highlights a significant milestone: African startups have now raised a cumulative $2.5 billion over the past 12 months (June 2024 to May 2025). This rolling 12-month total is the highest recorded since early last year, showcasing a consistent upward trajectory in investor confidence and the maturing potential of African innovation.

The Big Picture: Africa’s Resilience in a Shifting Landscape

The narrative of African tech funding in 2025 is one of strategic recalibration. After the unprecedented highs of 2021 and early 2022, which saw a surge of capital inflows, the continent, like its global counterparts, experienced a “funding winter.” This period saw investors scrutinize fundamentals more closely, prioritizing profitability, sustainable business models, and capital efficiency over rapid, unchecked growth. Yet, what the May 2025 figures reveal is not a slowdown, but a strategic consolidation and a focus on quality.

The 40% year-on-year increase in year-to-date funding for 2025 underscores a fundamental resilience. While the overall global venture capital landscape might be contracting, Africa’s inherent opportunities – driven by a youthful, rapidly digitizing population, increasing smartphone penetration, and pressing local challenges that tech can solve – continue to draw in capital. Investors are moving from a “growth at all costs” mentality to a more deliberate approach, seeking companies with proven revenue models and clear paths to scalability. This shift aligns with the broader outlook for 2025, which anticipates an investor concentration on quality, leading to fewer but larger deals.

“Fewer Deals, Bigger Cheques”: A Maturing Ecosystem

May 2025 encapsulated this evolving trend perfectly. Despite fewer individual deals recorded – only 36 startups announced raises of $100,000 or more – the total capital deployed remained significant. This points to a clear preference among investors for writing larger cheques for a select group of ventures. Specifically, seven startups managed to secure over $10 million each, a powerful signal that interest in African tech is not waning but becoming more focused and strategic.

This trend is indicative of a maturing ecosystem. Early-stage funding, while still crucial, is being complemented by a growing appetite for growth-stage companies that have demonstrated product-market fit, strong unit economics, and a viable path to scale. Investors, including prominent venture capital firms, corporate venture arms, and impact investors, are increasingly looking for startups that can not only generate returns but also create substantial social and economic impact across the continent. This is particularly true for sectors like climate tech, agri-tech, and health tech, which are attracting blended capital from diverse sources, including Development Finance Institutions (DFIs) and impact funds.

Egypt’s Ascendance: A Strategic Shift in Investment Gravity

The undeniable star of May 2025, and indeed much of 2025 so far, has been Egypt. The North African nation accounted for six of the seven biggest deals and has remarkably led the continent in startup funding year-to-date. Egyptian startups have collectively raised more than $330 million this year, representing a commanding 31% of all disclosed funding on the continent.

Egypt’s rise is no accident; it’s the culmination of deliberate government policies, a burgeoning tech-savvy population, and strategic investments in infrastructure. The Egyptian government has actively sought to improve the business environment and streamline procedures to attract foreign direct investment (FDI). Initiatives include revising legislation, simplifying processes, and promoting a transparent and competitive investment climate.

Key policies and advantages contributing to Egypt’s attractiveness include:

  • Robust Digital Transformation Agenda: Egypt’s ICT 2030 strategy, part of its broader Vision 2030, aims to build a “Digital Egypt” through developing ICT infrastructure, fostering digital inclusion, and transitioning to a knowledge-based economy. This includes programs to develop digital skills and encourage innovation.
  • Incentives for Investors: The government has introduced attractive incentives, such as reduced income and corporate taxes, lower customs duties on imported equipment, and even tax exemptions for startups for up to five years. For high-potential industries like electronics design, substantial corporate tax reductions (30-50%) and subsidies are available.
  • Developed Infrastructure and Large Market: Egypt boasts developed infrastructure, new smart cities, a significant domestic consumer market, and a qualified, cost-competitive workforce. Its strategic geographic location provides access to markets across the Middle East, Europe, Africa, and Asia, further enhancing its appeal as a regional hub.
  • Focus on Private Sector Empowerment: The state has emphasized empowering the private sector as a primary driver of economic growth, reducing bureaucratic hurdles and fostering a more dynamic labor market.

These concerted efforts have created a fertile ground for startups, making Egypt a magnet for both local and international capital, a testament to its commitment to fostering an innovative and resilient entrepreneurial ecosystem.

Spotlight on Egyptian Innovators: The Deals that Defined May

May’s funding landscape was largely shaped by a series of significant raises by Egyptian innovators, showcasing the diversity and ambition within the nation’s tech scene:

Nawy: Redefining Proptech in Africa ($75 million)

The biggest highlight of the month was Nawy, an Egyptian proptech platform that secured a groundbreaking $75 million. This monumental raise, comprising $52 million in equity through a Series A round led by Partech and $23 million in debt, marks it as the largest-ever proptech deal in Africa.

Nawy is at the forefront of transforming Africa’s real estate sector, historically plagued by opacity and fragmentation. The platform’s vision, born from a necessity for transparency, accessibility, and efficiency, is to digitize and democratize real estate transactions. Its offerings include:

  • AI-driven technology: Streamlining operations and enhancing user experience in a market often bogged down by traditional, slow processes.
  • Nawy Shares: Egypt’s first off-plan fractional ownership product, allowing individuals to invest in premium properties starting from as little as $500. This democratizes real estate investment, making it accessible to a broader middle-income segment.
  • Nawy Unlocked: A service focused on finishing and asset management, helping property owners convert underutilized or semi-finished properties into income-generating assets – a critical pain point in the market.
  • Nawy Partners: Empowering over 3,000 brokerages with real-time market inventory, direct developer connections, and tech-driven sales tools, creating a win-win for brokers and consumers alike.

Nawy’s success underscores a surge in demand for real estate as a hedge against inflation and currency devaluation in Egypt, particularly from expatriate buyers. The investment from a global player like Partech, known for its deep market insights, validates Nawy’s ambitious regional expansion plans into MENA markets like Morocco, Saudi Arabia, and the UAE, where real estate is booming.

Tasaheel: Pioneering Corporate Bond Issuance ($50 million)

Tasaheel, a subsidiary of the prominent Egyptian fintech unicorn MNT-Halan, completed Egypt’s largest corporate bond issuance to date, valued at $50 million (EGP 2.5 billion). This landmark issuance is a turning point for Egypt’s debt capital markets, demonstrating that corporate bonds can serve as a reliable and significant alternative to traditional bank financing.

The bond issuance, which received an investment-grade BBB+ rating, was structured in two tranches, attracting investment from both banking and, notably, a substantial portion from non-banking investors (60%). For Tasaheel, a leading lender for small businesses and entrepreneurs, this opens a strategic new funding channel to support its rapid growth and meet the increasing demand for business loans across Egypt. It signifies a growing sophistication in the Egyptian financial market, offering diverse financing avenues for scalable businesses.

Valu: Fintech on the Path to Public Listing ($27 million)

Egyptian fintech firm Valu successfully raised $27 million from Saudi investors, signaling strong cross-border confidence in its model. The firm is also reportedly preparing for a public listing, a significant move that could pave the way for other Egyptian tech companies to tap into public markets. Valu’s focus on consumer finance and deferred payment solutions addresses a crucial need for flexible payment options in a market with evolving consumer habits.

Thndr: Democratizing Investment ($15+ million)

Another key fintech player, Thndr, secured over $15 million. Thndr is a prominent investment platform in Egypt, focused on democratizing access to capital markets for a new generation of investors. By simplifying trading and investment processes, Thndr is tapping into a vast, underserved market of individuals seeking to build wealth.

Sylndr: Driving Mobility Innovation ($15+ million)

The mobility start-up Sylndr also raised over $15 million in a Series A round. Sylndr operates in the rapidly evolving mobility sector, likely focusing on areas such as vehicle ownership, leasing, or car-sharing platforms, addressing urban transportation challenges and evolving consumer preferences in Egypt.

Money Fellows: Expanding Digital Savings and Credit ($13 million)

Money Fellows, a digital savings and credit platform, secured $13 million in a pre-Series C round. This funding is earmarked for the company’s ambitious expansion plans outside of Egypt, highlighting the potential for successful Egyptian models to be replicated and scaled across regional and international markets. Money Fellows leverages traditional “ROSCA” (Rotating Savings and Credit Association) models but digitizes them, making them more efficient, transparent, and accessible.

Beyond the Nile: South Africa’s Healthtech Prowess and Other Key Markets

While Egypt commanded the spotlight in May, other key African markets continued to show strength and specialization. The lone non-Egyptian deal of over $10 million came from AURA, a South African healthtech start-up. AURA successfully closed a $15 million Series B round, co-led by Partech and CAIF, to fuel its entry into the crucial U.S. market.

South Africa: A Hub for Healthtech Innovation

AURA’s significant raise underscores South Africa’s growing prowess in the healthtech sector. African healthcare systems face unique challenges – underfunding, workforce shortages, and limited infrastructure – creating immense opportunities for tech-enabled solutions. South African healthtech startups are at the forefront of leveraging digital innovations to improve access, affordability, and outcomes.

Key trends in South African healthtech include:

  • Digital Health Solutions: Companies are leveraging technology to streamline appointment bookings, enhance diagnostic capabilities (e.g., AI-powered diagnostics), and facilitate remote consultations.
  • Government Initiatives: The South African government has introduced a Medical Technology Masterplan to bolster the sector, focusing on improving regulatory frameworks, market growth, and research innovation.
  • International Collaborations: There’s a notable influx of international funding and partnerships, exemplified by initiatives like the $50 million pan-African Transform Health Fund.

AURA’s move to enter the U.S. market is a significant validation of African tech quality and scalability, indicating that successful models developed on the continent can compete and thrive on a global stage.

Continental Dynamics: A Shifting Power Balance

The funding distribution in 2025 reveals an interesting dynamic among Africa’s traditional “Big Four” startup ecosystems:

  • Egypt: Leads with 31% of total disclosed investments.
  • South Africa: Follows closely at 26%.
  • Nigeria: Holds 15%.
  • Kenya: Accounts for 12%.

This represents a notable shift compared to previous years, where Nigeria and Kenya often dominated. While these four countries remain the primary magnets for capital, the rise of Egypt and the strong performance of South Africa indicate a broader distribution of innovation and investor interest across the continent. This concentration also means investors are increasingly focusing on the most developed startup scenes, which are perceived as lower risk and offer more mature opportunities. This dynamic encourages competition and specialization among these regional hubs, while also fostering a collaborative environment for pan-African expansion strategies.

The Significance of Exits: Building a Full Lifecycle Ecosystem

Beyond the significant funding rounds, May also witnessed four notable exit events, three of which were Egyptian. Exit events – whether through acquisitions, mergers, or initial public offerings (IPOs) – are critical indicators of an ecosystem’s maturity and health. They provide returns to early investors, allowing them to reinvest in new ventures, and offer founders and employees the liquidity needed to start new companies or become angel investors themselves, thus creating a virtuous cycle of innovation and capital.

The Egyptian exits in May included:

  • MaxAB-Wasoko’s acquisition of Fatura: This strategic acquisition in the B2B e-commerce and retail tech space consolidates market players and expands reach, creating larger, more formidable entities.
  • Merger between wellness start-ups Miran and Welnes: This merger signals consolidation in the health and wellness sector, aiming for greater market share and operational efficiencies.
  • Catalyst Partners Middle East’s $23 million acquisition of Qardy: This acquisition further highlights investor appetite for promising Egyptian ventures.

In West Africa, a major exit saw BioLite acquire a majority stake in Baobab+, a solar energy and digital services provider. This signals continued interest in the clean energy and off-grid solutions sector, which is crucial for addressing Africa’s energy deficits.

While some debate the impact of foreign acquisitions on retaining intellectual property and profits within the continent, these exits unequivocally demonstrate that African startups are building valuable, scalable businesses that attract significant interest from larger regional and international players. They provide tangible proof of concept and a pathway for liquidity that is essential for sustainable ecosystem growth.

Outlook: Navigating Challenges and Embracing Growth in 2025 and Beyond

Looking ahead, the long-term forecasts for venture capital investment in African tech remain overwhelmingly positive. Analysts predict a continued focus on quality over quantity, with larger growth-stage deals dominating. Key sectors expected to drive future growth include:

  • Fintech: Continues to be the primary magnet for capital, capturing a significant portion of all disclosed equity funding.
  • Climate Tech: With increasing global pressure to address climate change and Africa’s abundant renewable resources, startups in this sector (e.g., solar solutions, electric mobility) are attracting significant capital from both traditional VCs and impact investors.
  • AI: As artificial intelligence becomes increasingly integrated into various industries, AI-powered solutions across different sectors are poised for substantial investment.
  • Logistics, Agritech, and Healthtech: These sectors remain steady and show significant promise, addressing fundamental needs across the continent.

However, challenges persist. Regulatory hurdles, political volatility in some regions, and fragmented markets can still add a “political risk premium” to investments. The scarcity of established local funding sources means Africa remains highly dependent on foreign investors, who are more likely to pull back during global downturns. Despite this, there’s a growing push to build local funding sources, with countries like Ghana and Nigeria allowing pension funds to invest more in private equity.

The rise of venture debt as an alternative financing mechanism is also gaining momentum, providing a strategic cushion for mature startups. Furthermore, regions like Francophone West Africa are emerging as new investment frontiers, driven by growth in fintech and digital infrastructure, and bolstered by regional integration efforts like the African Continental Free Trade Area (AfCFTA).

Conclusion: A Continent on the Cusp of a New Era

May 2025’s funding figures are more than just numbers; they tell a compelling story of an African tech ecosystem that is evolving, adapting, and asserting its place on the global stage. The consistent growth, the concentration of capital into high-potential ventures, the emergence of new powerhouses like Egypt, and the increasing frequency of meaningful exit events all point to a continent on the cusp of a new era of digital innovation and economic transformation.

For entrepreneurs, investors, and policymakers, the message is clear: Africa’s startup journey is marked by resilience, ingenuity, and immense opportunity. As the ecosystem continues to mature, it promises to deliver not just financial returns, but also sustainable solutions that address the continent’s pressing challenges and unlock its vast human potential. The future of African tech is not just about the capital it raises, but the lives it impacts and the new horizons it creates.

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photo source: Google

By: Montel Kamau

Serrari Financial Analyst

11th June, 2025

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