Africa’s tech ecosystem is regaining ground. In the first half 2025, startups in Africa raised $1.42 billion. $1.42 billion was spent on 243 dealsa 78.3% rise from last year. This resurgence is a reflection of improved investor sentiment but also signals a change in the way growth is pursued. The period was defined more by strategic partnerships, market consolidation and measured expansion than by any single funding headline. Fintech dominates $1.42B in funding with 45%
The capital rebound was driven by debt and equity. Equity funding grew by 79% to $947 million in the past year, while debt financing increased by 75% to $448 millions. Grants have also risen to $26 million. This is double the $13 million raised during H1 2024 (). This growth was concentrated
. Fintech attracted 638.8 millions, or nearly 45% all funding in H1, confirming its dominance. Other well-funded industries included energy and water (219.4 millions), healthcare ($158.6 millions), and housing ($75million). Then came deeptech, education, and services. Contrastingly agriculture and logistics experienced steep declines as investors shifted capital away from sectors that had uncertain margins.
Fintech, energy and healthcare accounted for 71% all capital deployed.
M&A activity reaches anall-time high
In H1 2025 there were 29 mergers & acquisitions, the most in any half-year. This is a 45% increase from the same time period in 2024. Fintech was the most active acquisition sector, accounting for nearly half of deals.
Egypt and Kenya, with 8 and 7, respectively, were the hotspots.
This increase in M&A is a reflection of a more matured ecosystem, where scale-up and efficiency are achieved more through consolidation than organic growth.
Layoffs fall 56% as operations stabilize
Workforce cuts are sharp. 765 layoffs have been recorded in H1, compared to 1,730 in 2024which is a 56% decrease. Nigeria and Kenya were the two largest markets but layoffs have decreased significantly in both countries compared to last year.
Startup closures also decreased, with six closures as opposed to nine in the same time period last year. The majority of the cases were in Nigeria with only one in Kenya. The data indicates a stabilising environment where businesses are finding more durable models or exiting more quietly.
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20 startups expand internationally as part of a strategic push
Twenty startups expanded into new market during the first half of this year. Nearly half of these expansions took place outside Africa. These expansions were led by companies from Nigeria and Egypt, which often used international forays as a hedge against macroeconomic pressures at home. Fintech accounted for the majority of expansion activity
followed by logistics and transportation. LemFi’s expansion into the UK and Germany was notable, as was Gozem’s growth across Francophone Africa and PalmPay’s launch in four new African nations.
The pace of expansion was slower than in previous years (19459063), but it was still steady (10 per quarter), indicating a more deliberate scaling approach.
The growth of startups is driven by 34 strategic partnerships
There are at least 34 major strategic partnership in the fintech, telco and infrastructure sectors. These collaborations enabled startups to expand their reach, build infrastructure and cut costs more efficiently than they could by raising additional capital. Fintech partnerships centered on infrastructure and cross-border payments. Ecobank and XTransfer (19459063) focused on SME payments while Chipper Cash and Ripple (19459063) collaborated to use the blockchain for settlement. In the telecoms sector, Airtel Africa and MTN Zambia, among others, teamed up with SpaceX Starlink to increase connectivity via satellite. The move is intended to meet the needs of over 600 million Africans who do not have internet access.
Onafriq and Circle (19459063) piloted USDC intra-African payments while Flutterwave’s integration with social commerce platform Chpter enabled WhatsApp-based transactions across 14 countries.
Regulatory changes and strategic pivots.
Policy development and sector pivots have shaped the landscape more subtly. Nigeria launched CREDICORP to link credit histories with national IDs and approved open banking guidelines. Egypt introduced civic-tech platformto improve digital governance.
On the business side, Jumia launched a logistics-as-a-service arm, Payhippo rebranded as Rivy to enter greentech, and Twiga Foods shifted to a more asset-light model through 3 acquisitions. Telcos such as MTN have diversified their fintech offering, while Maroc Telecom has entered SaaS through a partnership.
An ecosystem that is more deliberate
In the first half of 2025, there was a clear shift from volume to value. Investors concentrated capital in fewer industries, and startups built resilience by funding, consolidating, collaborating, and using infrastructure more intelligently.
The current trajectory will see African tech surpass its funding total of 2,24 billion dollars in 2024. H1 2025, more than just the numbers, will be remembered for the moment that the ecosystem began to scale up through strategy and not speed. Download the full report here:
For more information on the data, case-studies, and insights, download the State of Tech in Africa report . This article was originally published by TechCabal Insightsand was written Stephen Agwaibor. Mark your calendars for
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