Sub-Saharan Africa’s Startup Funding Plunges 50% So Far in 2025

Sub-Saharan Africa’s venture capital landscape continues its steep retreat in 2025, with total deal value as of May standing at just US $318.8 million, an important 50.4% decline from the same period in 2024, and down 61% from 2023’s peak of US $825.4 million. Deal count tells a similar story: only 114 funding rounds have been recorded year-to-date, down nearly half from 221 deals in 2024 and 281 in 2023.

This marks the second consecutive year of contraction in both deal value and volume. Mega-rounds, once headline-grabbing staples of the ecosystem, have vanished entirely in 2025. No funding round has breached the US $100 million mark so far, in contrast to 2023 and 2024 when companies like M-KOPA, Showmax, and Moove closed large-scale investments.

What we’re seeing is a marked shift in investor behavior—fewer checks, smaller amounts, and a laser focus on fundamentals. In today’s capital-scarce climate, venture capitalists are doubling down on startups that demonstrate strong unit economics, proven product-market fit, and mission-critical services.

South Africa remains the region’s funding heavyweight, producing both the largest deal of May and the top two year-to-date. However, innovation hotspots are emerging elsewhere in Kenya and Nigeria, particularly in the clean energy and e-mobility spaces. This reflects a subtle but important sectoral pivot away from FinTech toward sustainability-driven innovation.

Macroeconomic headwinds, including high sovereign debt, rising interest rates, and fragile external financing conditions, are dampening investor risk appetite across SSA. The World Bank forecasts a tepid 3.7% GDP growth for the region in 2025, barely outpacing population growth. Persistent youth unemployment, climate vulnerability, and declining aid flows are further aggravating the investment climate.

Yet amid the downturn, promising startups are adapting: stretching runway, tightening costs, and targeting impact-driven capital. For founders and funders alike, resilience, discipline, and mission clarity will be key to surviving the current venture winter.

Top 5 May 2025 Funding Rounds in SSA

1. Aura (South Africa) raised $15M Series B from Cathay AfricInvest Innovation Fund and Partech
2. Zero Carbon Charge (South Africa) secured $5.6M seed funding from the Development Bank of Southern Africa 
3. ARC Ride (Kenya) closed a $5M round from British International Investment
4. BURN (Kenya) raised $5M from EDFI ElectriFI
5. Cutstruct (Nigeria) secured $1.5M seed funding from CRE Venture Capital