Startups in Nigeria and other African countries are starting strong as funding into the ecosystem increased by 240 percent year-on-year to $289 million in January 2025,9am news reports.
Africa: The Big Deal, an agency that monitors startups, reported that Startups in Africa raised $85 million in January 2024, making it the second-best month for startup funding since 2019. The only exception was January 2022 during the height of the funding boom.
Nonetheless, the funding tracker pointed out that equity financing dominated the fundraising scene, contributing more than $262 million or 90% of the total obtained. This is a significant increase over the amount raised in January 2024.
According to Africa: The Big Deal, Nigeria, Kenya, Egypt, and South Africa make up the four countries with the biggest funding deals in January 2025.
They contributed almost 60% of the total funds raised throughout the continent.
A part of the report seen by 9am News Nigeria read:
“Enko Education secured $24 million to continue growing its network of African schools, and Naked, an insurance-technology company, secured a $38 million Series B to automate and expand its product offering.”
“LemFi (a fintech company) raised $53 million to grow into Asia and Europe, while PowerGen, an energy-focused firm, raised more than $50 million to create a scalable platform for distributed renewable energy solutions throughout Africa.”
These noteworthy deals demonstrate the increasing capacity of African companies to operate outside of the continent.
According to experts, the strong performance of African startups in January portends a positive fundraising wave for Africa’s startup ecosystem, which faced severe funding difficulties in 2023 and 2024.
With only $1.5 billion in equity raised in 2024, African startups received less than 1% of global funding.
Conclusion
Nigerian startups have a lot of opportunities to better position themselves for funding in 2025.
“The funding landscape for African startups is evolving, and 2025 will likely see a mix of challenges and opportunities,” Davidson Oturu, a general partner at Nubia Capital noted.
Foreign investors are still very cautious and selective when doing business in Africa, and startups will need to show strong fundamentals, scalability, and the ability to solve real problems to attract their attention.
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