Nigeria and other African entrepreneurs are off to a promising start, with funding into the ecosystem increasing by 240 percent yearly to $289 million in January 2025, compared to the same month in 2024.
African businesses raised $85 million in January 2024. However, according to funding tracker “Africa: The Big Deal,” this January 2024 performance made it the second-best January for startup funding since at least 2019, trailing only the January 2022 period during the height of the fundraising boom.
However, according to the funding tracker, equity financing dominated the fundraising scene, contributing more than 90% of the $262 million total raised—a significant increase over the amount in January 2024.
January equity fundraising is at its second-highest level in the previous six years.
Africa: According to The Major Deal, the four major countries – Nigeria, Kenya, Egypt, and South Africa – accounted for around 60% of the total funds raised throughout the continent in January 2025, and they closed the four biggest transactions.
According to The Big Deal, “LemFi (Fintech) secured $53m to further expand into Asia and Europe, while PowerGen, an energy-focused startup, raised $50m+ to establish a scalable platform for distributed renewable energy solutions across Africa.”
“Enko Education secured $24m to continue growing its network of African schools, and Naked, an insuretech company, secured a $38m Series B to automate and expand its product offering.”
Three of these acquisitions are noteworthy because they demonstrate the increasing trend of African startups growing their businesses outside of the continent.
The January 2025 performance, according to experts, portends a positive fundraising surge for Africa’s startup sector, which encountered severe funding difficulties in 2023 and 2024. African startups raised $1.5 billion in equity in 2024 but received less than 1% of worldwide capital.
According to Davidson Oturu, general partner at Nubia Capital, Nigerian entrepreneurs have many chances to improve their fundraising positioning in 2025.
He stated, “The funding ecosystem for African entrepreneurs is changing, and 2025 will likely bring a combination of problems and possibilities. Foreign investors will remain important players, but global economic constraints may cause them to be more cautious and discriminating. Startups will need to demonstrate strong fundamentals, scalability, and the ability to solve real problems to attract their attention.”
