Nigeria and Kenya drive $289m startup funding surge in January 2025

In January 2025, African startups raised a record $289 million in funding, a 240% increase from $85 million in January 2024. This surge in investment makes January 2025 the second-best month for startup funding in six years, surpassed only by January 2022, when Africa’s funding boom reached its peak.

The bulk of the funding, $262 million, came from equity financing, representing over 90% of the total amount raised. This is a significant increase from the $76 million raised through equity in January 2024. The substantial rise in equity funding highlights growing investor confidence in African startups.

Countries like Nigeria, Kenya, Egypt, and South Africa played a significant role in this growth, accounting for 60% of the total funds raised. Among the standout deals, PowerGen secured a $50 million investment to expand its renewable energy solutions, while LemFi raised $53 million to further its expansion into Asia and Europe. These investments reflect the growing global interest in African innovation.

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“The startup ecosystem is experiencing renewed momentum,” according to ‘Africa: The Big Deal’ in its latest report. “This surge demonstrates investor confidence in African founders’ ability to address global and local challenges through innovation.”

Nigerian entrepreneurs are optimistic about the future, focusing on key trends and challenges they expect to shape the sector in 2025. Omobolaji Shittu, CEO of Bolat Paints, emphasised that sustainability will drive growth in Nigeria’s industrial sector. “The demand for non-toxic, lead-free products is rising. Startups that prioritise health and environmental safety will thrive,” she stated.

Sarah Emuebie, founder of Gokleen Cleaning and Maintenance, noted that “access to affordable power remains a major issue.” Her company is investing in alternative energy sources to maintain operations, while also focusing on local sourcing to manage costs amid rising inflation and currency instability.

Vivien Ene, CEO of Wig-It Nigeria, explained that “AI-driven personalisation” is transforming the beauty-tech industry. She also sees blockchain reshaping product sourcing, ensuring sustainability in the wig and hair extension sector.

Zimuzo Nwabueze Ofor, CEO of Eco-Green Solar Systems, pointed out that “investors are prioritising ventures that address Nigeria’s biggest challenges, like energy access and sustainability.” However, she noted that competition is intensifying, and startups must show both profitability and long-term impact to stand out.

Olapeju Nwanganga, founder of Ploutos Page, urged the government to reduce bureaucracy and improve access to credit. “Streamlining regulations and offering tax incentives could accelerate innovation and growth,” she said.

Read also: How bootstrapped Nigerian startups are thriving against the odds in 2025

Finally, Munirat Ojotu, founder of February by Munirah, advised new entrepreneurs to focus on community-building. “In Nigeria, word-of-mouth marketing and brand loyalty are powerful,” she said. “Build a strong community that believes in your brand—it will help you scale faster than any paid advertisement.”