Africa’s startup ecosystem recorded more than $2 billion in funding in 2025, according to fresh data from Briter.
Over 500 deals were completed during the year, with a median deal size of $1 million, clear evidence of investors’ growing appetite, even in a more cautious funding climate.
The ecosystem also witnessed over 35 acquisitions, reflecting a trend of consolidation as exits and strategic buyouts gained pace.
Yet, the year was not without its setbacks. More than five startups ceased operations, including some well-capitalized players that once showed great promise, underscoring the difficulty of building sustainably in Africa’s often challenging business landscape and within a tighter global capital market.
The combination of rising capital inflows, a wave of acquisitions, and high-profile closures paints a picture of an ecosystem that is expanding while simultaneously recalibrating.
— Edukoya, a Nigerian edtech startup, shut down in February, just three years after raising what was then Africa’s largest pre-seed round of $3.5 million in 2021.
The company cited limited market readiness, poor connectivity, restricted access to devices, weak disposable incomes, and broader macroeconomic pressures as the key challenges.
In its statement, Edukoya admitted it was ultimately ahead of its time and confirmed it had opted to cease operations while returning capital to its investors.
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— Okra, founded in 2019 to pioneer open finance in Africa by building APIs that allowed users to securely link bank accounts to third-party apps, announced its closure in July.
The company had attracted early support, raising $1 million in pre-seed funding from TLcom Capital and a $3.5 million seed round led by Susa Ventures.
In total, Okra secured over $16.5 million, suggesting additional funding beyond its seed round, but despite this, it was unable to sustain operations.
— Lipa Later, the Kenyan fintech established by Eric Muli and Michael Maina, was placed under administration in March 2025, only three months after securing KSh1.36 billion ($9.88 million) in debt and equity to drive its African expansion.
Over time, the company had raised a total of $16.6 million from investors including Lateral Frontiers, 54 Collective, and GreenHouse Capital.
Known for providing consumer credit and e-commerce solutions to merchants, Lipa Later struggled with severe funding gaps that eventually forced its collapse.
— Afristay, a South African accommodation booking platform, officially closed operations in early 2025.
Director Rupert Bryant revealed that by the end of 2023 the company had downsized drastically, with only about 30 bookings per month and two part-time staff members remaining before the final shutdown.
— Medsaf, a Nigerian pharmaceutical supply chain startup, ceased operations after grappling with significant debts, unsuccessful fundraising rounds, and a failed acquisition attempt.
The company, which had aimed to combat the widespread issue of fake and substandard medicines, had previously raised over $7 million from investors including Y Combinator and Techstars, according to Startupgraveyard.
— Bento Africa, a Nigerian HR technology startup, temporarily suspended operations in February following allegations of tax and pension irregularities.
The shutdown occurred shortly after founder and CEO Ebun Okubanjo resigned. The company had also laid off its engineering team amid employee protests over unpaid salaries, further compounding its troubles.
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Image Credit: Business Insider Africa
