Nigeria shines as Africa’s startup funding jumps 240%

Nigeria and other African startups are off to a bright start as funding into the ecosystem rose by 240 percent year-on-year to $289 million in January 2025, compared to the corresponding period of 2024.

In January 2024, African startups raised $85 million. However, this performance in January 2024 made it the second-best January for startup funding since at least 2019, falling behind only the January 2022 period during the peak of the funding boom, according to ‘Africa: The Big Deal,’ a funding tracker.

The funding tracker noted, however, that equity financing dominated the fundraising landscape, accounting for over 90 percent of the total amount raised at $262 million, which is a leap from the figure in January 2024. It also marks the second-highest January for equity fundraising in the past six years.

Africa: The Big Deal noted that the four largest deals in January 2025 came from the big four (Nigeria, Kenya, Egypt, and South Africa), and they accounted for about 60 percent of the total funding raised across the continent.

The Big Deal said, “PowerGen, an energy-focused startup, raised $50m+ to establish a scalable platform for distributed renewable energy solutions across Africa, LemFi (Fintech) secured $53m to further expand into Asia and Europe.

Read also: Funding rebounds as African startups raise $289m in January

“Naked, an insuretech firm, bagged a $38m Series B to automate and expand its product offering; and Enko Education secured $24m to keep expanding its network of African schools.”

Notably, three of these deals highlight a growing trend of African startups expanding their operations beyond the continent.

Experts believe the performance in January 2025 signals a promising wave of funding in Africa’s startup ecosystem, which faced significant funding challenges in 2023 and 2024. In 2024, African startups only got less than 1 percent of global funding, with $1.5 billion in equity raised.

Davidson Oturu, general partner at Nubia Capital, noted that Nigerian startups have significant opportunities to position themselves better for funding in 2025.

He said, “The funding landscape for African startups is evolving, and 2025 will likely see a mix of challenges and opportunities. Foreign investors will remain significant players, but global economic pressures may lead them to be more cautious and selective. Startups will need to demonstrate strong fundamentals, scalability, and the ability to solve real problems to attract their attention.