Mergers and acquisitions (M&A) have become a key growth strategy for established African startups aiming to increase market share, build stronger talent pools, or acquire new technologies.
This trend is highlighted in a report published on July 24, 2025, by digital economy consulting firm TechCabal Insights.
The report, titled “The State of Tech in Africa H1 2025: Building momentum through strategic partnerships,” recorded 29 M&A deals in the African tech ecosystem during the first six months of 2025.
This is the highest number ever reported for a half-year period, marking a 45% increase compared to the first half of 2024 and a 53% rise from the same period in 2023.
This surge in consolidation reflects a maturing market where financially stable startups are acquiring competitors, while early-stage startups struggling to raise funds seek mergers or acquisitions with better-capitalized companies.
Breaking down the sectors involved, fintech led with 13 deals, followed by e-commerce with 6, mobility with 3, telecommunications and health technology (healthtech) each with 2, deeptech with 2, and climate tech with 1.
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Regionally, North Africa led with 8 deals, East Africa had 7, West Africa 6, and Southern Africa 4.
Additionally, four transactions involved startups headquartered outside Africa.
Notable transactions included Nigerian fintech LemFi’s acquisition of Irish fintech Buttercrane, and MaxAB-Wasoko, a B2B e-commerce company operating in Egypt and Kenya, acquiring Egyptian startup Fatura.
The report also highlighted geographic expansion as a significant growth factor.
There were 20 recorded expansions into new markets within or outside Africa during the first half of 2025, slightly up from 19 in 2023.
Of these, nine expansions involved African startups entering international markets, signaling a strong push for global competitiveness.
Within Africa, startups focused on broad regional expansions rather than entering single countries.
Five expansions covered multiple African nations, while four targeted new markets specifically in West Africa.
Nigerian and Egyptian startups led this movement, completing five and four cross-border expansions respectively, leveraging their strong domestic bases.
In terms of workforce changes, African startups laid off 765 employees during the first half of 2025, mainly due to bankruptcies or efforts to streamline operations and extend financial sustainability.
This represents a 55.7% decrease compared to layoffs in the same period of 2024, indicating some stabilization after two challenging years marked by a funding drought.
The majority of layoffs occurred in Nigeria (416) and Kenya (328), following the closure of six startups including Nigerian fintech Okra and Kenyan fintech Lipa Later.
On the funding front, African startups raised $1.42 billion in the first half of 2025, a 78% increase compared to the same period in 2024.
Four countries, Nigeria, Kenya, Egypt, and South Africa, accounted for 76.34% of total funding raised.
Looking ahead, TechCabal Insights anticipates continued growth in M&A activity alongside increasing funding as the African venture capital market warms up once again.
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Image Credit: Tekedia
