Africa’s tech ecosystem is regaining its footing. In the first half of 2025, startups on the continent raised $1.42 billion across 243 deals, a 78.3% increase from last year. While this resurgence reflects improving investor sentiment, it also signals a shift in how growth is pursued. Strategic partnerships, market consolidation, and measured expansion defined the period more than any singular funding headline.
$1.42B funding: Fintech dominates with 45% share
The rebound in capital was driven by equity and debt. Equity funding reached $947 million, up 79% year-on-year, while debt financing grew 75% to $448 million. Grants also rose to $26 million, doubling the $13 million raised in H1 2024.
Yet, this growth was concentrated. Fintech attracted $638.8 million, nearly 45% of all funding in H1, cementing its dominance. Other well-funded sectors included energy and water ($219.4 million), healthcare ($158.6 million), and housing ($75 million). Services, deeptech, and education followed. Contrastingly, agriculture and logistics saw steep declines, as investors moved capital away from sectors with uncertain margins.
The most dramatic sectoral shift occurred in housing, which saw a 3,650% increase year-on-year, largely driven by a single landmark deal. In total, the top three sectors, fintech, energy, and healthcare, accounted for 71% of all capital deployed.
29 deals: M&A activity hits all-time high
There were 29 mergers and acquisitions in H1 2025, the highest of any half-year since tracking began. This represents a 45% jump from the same period in 2024. Fintech remained the most active sector for acquisitions, responsible for nearly half of all deals.
Notable transactions included Stitch’s acquisition of ExiPay, Moove’s purchase of Brazil’s Kovi, and Moniepoint’s expansion into Kenya through the acquisition of Sumac Microfinance Bank. Egypt and Kenya were the hotspots, with 8 and 7 acquisitions, respectively.
The uptick in M&A reflects a more mature ecosystem, where scale and efficiency are increasingly achieved through consolidation rather than organic growth alone.
Layoffs drop 56% as operations stabilise
Workforce reductions fell sharply. At least 765 layoffs were recorded in H1, down from 1,730 in H1 2024, a 56% drop. Nigeria and Kenya, the largest markets, saw the highest numbers, but layoffs in both countries declined significantly from last year.
Startup shutdowns also dropped, with six closures compared to 9 in the same period last year. Most were concentrated in Nigeria, with one case recorded in Kenya. The data suggests a stabilising operating environment, where businesses find more durable models or exit more quietly.
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20 startups expand internationally in strategic push
Twenty startups expanded into new markets during the first half of the year. Nearly half of the expansions were outside Africa. Companies from Nigeria and Egypt led these moves, often using international forays to hedge against domestic macroeconomic pressures.
Fintech again accounted for most of the expansion activity, followed by logistics and transport. Notable moves included LemFi’s entry into the UK and Germany, Gozem’s expansion across Francophone Africa, and PalmPay’s launch in four new African countries.
Unlike in previous years, the pace of expansion remained steady (ten in each quarter), reflecting a more deliberate approach to scaling.
34 strategic partnerships drive startup growth
At least 34 major strategic partnerships were recorded in fintech, telco, infrastructure, and healthcare sectors. These collaborations allowed startups to extend reach, build infrastructure, and cut costs, often more efficiently than raising additional capital.
In fintech, partnerships focused on cross-border payments and infrastructure. Ecobank and XTransfer targeted SME payments, while Chipper Cash and Ripple collaborated to use blockchain for settlement. In telecoms, Airtel Africa, MTN Zambia, and others teamed up with SpaceX’s Starlink to expand connectivity via satellite. The move aims to address the needs of more than 600 million Africans without internet access.
Elsewhere, Onafriq and Circle piloted USDC for intra-African payments, while Flutterwave’s integration with social commerce platform Chpter unlocked WhatsApp-based transactions in 14 countries.
Regulatory shifts and strategic pivots
Policy developments and sector pivots shaped the landscape in quieter ways. Nigeria launched CREDICORP, linking credit histories to national IDs, and finally approved open banking guidelines. Egypt introduced civic-tech platforms aimed at improving digital governance.
On the business side, Jumia launched a logistics-as-a-service arm, Payhippo rebranded as Rivy to enter greentech, and Twiga Foods shifted to a more asset-light model through 3 acquisitions. Telcos like MTN deepened their fintech offerings, while Maroc Telecom moved into SaaS via a partnership with Zoho.
A more deliberate ecosystem
The first half of 2025 marked a clear pivot from volume to value. Investors concentrated their capital in fewer sectors, and startups built resilience through funding, consolidation, collaboration, and smarter use of infrastructure.
If the current trajectory holds, African tech is set to surpass its 2024 funding total of $2.24 billion. But more than the numbers, H1 2025 will be remembered as the moment the ecosystem began to scale through strategy, not speed.
Download the full report: To explore the data, case studies, and insights in greater detail, download the State of Tech in Africa H1 2025 report.
This article was originally published on Insights and was written by Stephen Agwaibor, Insights.
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