Four countries absorbed 84% of all funding, with South Africa and Kenya alone accounting for more than half. Egypt followed. Nigeria slipped to 8%, its lowest share since 2019, after years as the top destination for large funding rounds.

However, Nigeria still closed more deals than any other country.

That contrast runs through Briter’s findings as deal volume stayed high, but cheque sizes grew larger and fewer. African startups are still forming and raising capital, but in 2025, funding became harder to access.

Fintech and climate-focused businesses received most of the funding by value, driven by large, capital-heavy deals. Agriculture, health, education and AI startups accounted for most transactions, keeping innovation spread wide even as funding clustered at the top.

How companies raised money also changed. Debt financing crossed $1 billion for the first time, overtaking equity as scaled startups leaned on loans, structured facilities and other non-dilutive instruments to grow. 

Revenue strength, assets and predictability are now more important than rapid expansion.

Exit activity hit a record. Sixty-three acquisitions were announced in 2025, the highest ever recorded. More than half involved startups being bought by corporates, not other startups or private equity firms. Few disclosed prices, but the volume alone shows a market where buying has become easier than building.

Foreign investors still dominate African venture funding, led by the United States and Europe. Briter, however, notes a gradual widening of the pool, with more inflows from Asia and the Gulf, alongside a stronger base of Africa-focused investors providing steadier capital.

The bigger picture is restraint, not retreat. Dario Giuliani, founder and managing director at Briter, said Africa’s investment landscape continues to move through cycles of expansion and preservation, with the current phase firmly in the latter. 

“Capital is more selective, risk appetite more measured, and growth expectations more realistic,” he noted. “Yet beneath this restraint, company formation remains active across the continent, even as a handful of ecosystems continue to dominate and true geographic diversification remains limited.”

In short, funding has returned but access has not. Africa’s tech sector is still moving forward, just with fewer passengers in first class.

It was a fitting homecoming for Africa’s startup sector. Ten years after ABAN was born to unite early-stage investors across the continent, the movement returned to where Africa’s entrepreneurs thrive the hardest, Lagos.

The 2025 ABAN Annual Congress, themed “Accelerating Local Capital Participation,” gathered hundreds of founders, investors, policymakers, and ecosystem enablers to tackle the question of “Who really funds Africa’s future?”

Representing Governor Babajide Sanwo-Olu, Mrs Folashade Ambrose-Medebem, Lagos State commissioner for Commerce, Cooperatives, Trade and Investment, described the city, with 23 million people and more than 2,000 active startups, as a living, breathing symbol of African ambition. 

“Lagos stands as the commercial heartbeat of Africa and a city of boundless enterprise, boundless resilience and boundless innovation,” she said, welcoming the continent’s top angel investors.

She also noted the city contributes over 30% to Nigeria’s GDP and houses 65% of its industrial activity, but its actual power lies in what it’s building, a model megacity driven by innovation, not just infrastructure.

Through reforms, Lagos has simplified business registration, created startup funds, and is now developing the Lagos State Medical Innovation Industrial Zone, Ikorodu Industrial Hub, and a new International Convention Centre.

“Beyond the numbers, Lagos State is a story of determination, creativity, and possibility,” Ambrose-Medebem said. “It is where ideas become industries and where vision meets execution.”

Osinbajo: Believe Before You Build

Prof. Yemi Osinbajo, speaking on the heart of Africa’s funding dilemma, said, “Without local belief and resilience, there is no local validation. Unless there is local belief and resilience, why should anyone invest in us?”

He challenged investors to become “the capital that understands the context, stays through the storm, mentors, guides, and builds companies designed to last in Africa or after that.”

“When we invest locally, we are not just funding startups, we are funding our own future.”

A Reality Check for Africa’s Angels

That future, however, still faces major gaps, as Khaled Ismail, chairman of HIMAngels, pointed out in his session on The State of Angel Investing in Africa.

He revealed that Africa now counts around 6,000 angel investors, up from barely a hundred a decade ago. Yet, only 10% of them are actively investing.

“Imagine all of those 6,000 were investing. Imagine how big the ecosystem would have grown,” he said.

The continent’s average angel investment ticket sits at $3,500 per year, compared to $15,000 in India, a country with the same population but five times more investors. That gap, Ismail argued, has ripple effects across the entire ecosystem.

“That’s 20 times more angel capital being poured into India’s ecosystem compared to Africa’s,” he said. “And it’s no surprise that they have more unicorns and exits, their base is simply bigger.”

But beyond the numbers, Ismail reminded us what true angel investing really means.

“It’s not just about making money. It’s about giving back, mentoring, sharing experience. If you don’t get involved, it will never happen,” he said. “Just putting your money and sleeping on it will not get you there.”

He called for better alignment between angels, founders, and venture capitalists, and for new clauses that let angels exit early when venture funding arrives, freeing up funds for fresh investments.

“If angels don’t exit, they won’t invest again,” he warned. “And if they don’t invest again, the pipeline breaks.”

Ten Years On: A Movement Grows

Commendably, ABAN also celebrated those who are building that pipeline. Adedotun Sulaiman was named Angel Investor of the Year, while Core Angels MEA received Angel Network of the Year.

For an ecosystem once dependent on foreign backing, the progress is concrete, but the work is far from over. Africa’s next decade of growth will depend on building confidence, capital, and collaboration at home.

In Osinbajo’s words, “Let’s first be believers.”

Over the past decade, angel networks across Africa have invested $35 million into more than 1,200 early-stage startups, a solid foundation, but tiny compared to the continent’s potential. 

In the East African economic block alone, 18 active networks, from Nairobi Business Angel Network to Ajax Capital Group, form one of the region’s most active clusters. However, real capital flows usually lag behind policy results.

At ABAN Congress 2025 in Lagos, themed “Accelerating Local Capital Participation,” this gap will be addressed. African startups raised $289 million in 2025 alone, with 90% in equity deals, revealing a shift toward more structured, scalable investment. 

Angel syndicates now account for 46% of investments, enabling pooled capital, shared risk, and larger deals. Catalytic Africa, ABAN’s co-investment platform, has mobilised 10× more capital since 2022, backing startups across 15+ countries. Despite these advances, we wonder why policy is not translating into capital in the hands of founders?

To understand why these policies haven’t fully translated into funding, Techeconomy spoke with Martin Warioba, managing partner at Warioba Ventures and a leading voice in East Africa’s investment ecosystem, to dissect the gap between policy intentions and actual capital deployment, and explore ways to turn investor-friendly frameworks into real-world funding.

Turning Policy into Capital

On the disconnect between policy and execution, Warioba says: “Policies like the Startup Act or tax incentives mainly exist but are undermined by unclear implementation guidelines, slow regulatory approvals, and minimal awareness among local stakeholders.”

“The real gap is execution muscle and ecosystem feedback loops. Without collaboration between policymakers and actual capital deployers, policies risk becoming symbolic rather than catalytic.”

A policy in East Africa that has already had a measurable impact on early-stage investment is Rwanda’s Capital Markets Authority (CMA) regulatory framework for Collective Investment Schemes (CIS).

“This has provided a clear path for registering venture capital funds and has attracted cross-border investment. Warioba Ventures has leveraged this policy to structure its Pan-African VC fund with domiciliation in Kigali.

“Catalytic Africa’s matching fund could be another example – though not a policy per se – has operationalised policy intentions by directly channelling local and foreign capital into early-stage startups.”

While Rwanda shows what’s possible with the right framework, scaling impact across East Africa also requires active participation from angel networks.

The Role of Angel Networks

Angel investor networks, Warioba explains, are essential to bridging the gap between policy and capital: “Angel networks are the frontline of early-stage capital. They see firsthand what policies work, where frictions lie, and what founders need to thrive. Angel networks can translate these insights into actionable policy proposals – on tax breaks, capital gains treatment, investor protection, and cross-border capital mobility.

“More importantly, angel networks can pilot co-investment models, like Catalytic Africa, that demonstrate what’s possible when policy meets private initiative.”

Warioba stresses that inclusive policy must extend beyond urban hubs: “Governments must decentralise innovation infrastructure – innovation hubs, access capital, and capacity building programs – beyond major cities. Policies should include incentives for investors who support startups in rural or underserved regions.

“Digital infrastructure and interoperable payment systems remain foundational to building inclusive ecosystems across East Africa’s secondary cities and border regions.”

On government agencies to partner with in order to unlock capital flows immediately, he says: “I will work with the Ministry of Finance to establish the Startup Investment Guarantee Facility backed by public and philanthropic capital.

“This facility would de-risk private and foreign capital entering early-stage startups through first-loss guarantees and co-investment structures into early-stage funds managed by licensed local GPs. This would signal long-term national commitment and crowd in institutional and private participation across the region.”

With ABAN Congress 2025 approaching, Warioba stresses that policies alone do not move capital for any startup; but combined with strategic co-investment models, engaged angel networks, and targeted government initiatives, East Africa has the potential to become a thriving region where startups can scale successfully.

According to the latest report by Africa: The Big Deal, 83% of the total was raised by two companies, d.light and Sun King. 

d.light, an energy solutions company providing affordable and sustainable solar power to communities across Kenya, Uganda, and Tanzania, expanded its receivables financing by $300 million.

Sun King, one of Africa’s leading off-grid solar energy providers, secured a $156 million debt facility.

In July, 61 startups announced at least $100,000 in funding, a significant jump compared to the first half of the year, when the number typically hovered around 40 or fewer.

Of the 61 startups, spread across 15 countries, 41 were located in the “Big Four” markets: Nigeria, Egypt, South Africa, and Kenya. However, $493 million, representing 89% of the total funding raised, came from debt deals.

In terms of equity, $58 million was announced, marking the lowest equity funding within a month this year. Rwazi’s $12 million Series A was the largest equity deal in July.