The African tech ecosystem staged a strong recovery in 2025, with startups across the continent raising a combined US$4.1 billion, marking a 25% increase year-on-year and the strongest funding performance since 2022.

The rebound was detailed in Partech’s Africa Tech Venture Capital Report, released on January 22, 2026, which also pointed to notable changes in how African startups are financing their growth.

Funding Rebounds as Debt Financing Takes Centre Stage

Equity funding reached US$2.4 billion, reflecting an 8% increase from 2024 across 462 deals. However, the standout development was the sharp rise in debt financing, which surged to a record US$1.6 billion, up 63% year-on-year.

Debt accounted for 41% of all capital deployed in 2025, a significant jump from 31% in 2024 and just 17% in 2019, underscoring its growing role in startup financing across Africa.

Overall deal activity also recovered, climbing 7% to 570 transactions, signaling renewed investor confidence following two years of slowdown.

The data suggests that later-stage startups with predictable revenues are increasingly opting for non-dilutive capital as part of more sustainable growth strategies.

Kenya Leads Capital Raised as Investment Remains Concentrated

From a geographic perspective, Kenya emerged as the top destination for total capital, raising US$1.04 billion, largely driven by large debt rounds and participation in four of the nine megadeals recorded in 2025.

South Africa reclaimed the leading position in equity funding and total deal count for the first time since 2017, supported by consistent deal flow rather than outsized rounds.

Nigeria and Egypt continued to rank among the top four markets, with these countries collectively accounting for 72% of all capital raised across the continent. Outside these core ecosystems, only a handful of countries surpassed US$50 million in equity funding, highlighting the continued concentration of investment within a small number of markets.

FinTech Dominates as Sector Diversification Gains Momentum

On the sector front, FinTech remained the largest recipient of equity investment, reflecting its ongoing importance in driving financial inclusion and digital transformation.

Encouragingly, the report noted growing diversification, with cleantech, healthtech, and enterprise software all recording strong gains, signaling a more balanced and mature innovation landscape.

Despite the overall recovery, female-founded startups continued to receive a disproportionately small share of funding, pointing to persistent gender gaps that remain unresolved.

Meanwhile, while equity markets stabilized, they did not experience rapid expansion. Instead, average deal sizes at Series A and Series B increased, suggesting investors are backing fewer companies with larger checks and shifting focus from seed-stage activity toward scale-ready businesses.

Taken together, the 2025 rebound reflects a maturing African tech ecosystem—one that is increasingly leveraging a mix of equity and non-dilutive capital, prioritizing sustainable growth, and expanding beyond traditional FinTech dominance into a broader range of high-impact sectors.