Africa's Tech Sector Amasses $1.42 Billion in H1 2025, Marked by Increased Mergers and Acquisitions
African tech startups experienced a significant surge in growth during the first half of 2025, with record-breaking funding, mergers and acquisitions (M&A), and strategic partnerships. This development signifies a maturing market that is moving from a focus on volume to strategic value.
Funding
African tech startups raised a total of $1.42 billion in H1 2025, marking a 78% increase year-over-year. This growth places the total 2025 funding on track to surpass $2 billion by August [1][2][4][5]. The funding growth is concentrated in select countries, notably Nigeria, Egypt, and Kenya, and sectors, with FinTech, CleanTech, and AI leading investments [3][5]. Venture debt financing surged, accounting for 45% of 2025 funding (up from 33% in 2024), raising questions about startup sustainability [4].
M&A Activity
M&A deals hit a record 29 transactions in H1 2025, a 45% increase over H1 2024, driven primarily by fintech and market consolidation [1]. These acquisitions reflect a trend where established startups acquire competitors or innovative firms to expand market share, access talent, and strengthen technology [1]. About 20 startups expanded regionally or globally, especially from Nigeria and Egypt [1].
Strategic Partnerships and Ecosystem Shifts
Ecosystem maturity is seen in startups focusing on strategic collaborations and infrastructure optimization, moving beyond rapid scale to deliberate, value-driven growth [2]. Example partnerships include Maroc Telecom’s move into SaaS via collaboration with Zoho, and Flutterwave’s integration with social commerce platforms enabling WhatsApp-based payments in multiple countries [2]. Regulatory developments, such as Nigeria’s open banking guidelines and Egypt’s civic-tech platforms, support digital governance and innovation [2].
In summary, H1 2025 in African tech is characterized by accelerated funding with a focus on select sectors, record M&A activity led by fintech consolidation, and strategic partnerships that deepen ecosystem sophistication and cross-border expansion [1][2][3][4][5]. Layoffs dropped by 56% in H1 2025, with 765 recorded compared to 1,730 in the same period the previous year. Fintech companies continued to expand, with LemFi entering the UK and Germany, Gozem expanding across Francophone Africa, and PalmPay launching in four new African countries.
[1] TechCabal [2] Disrupt Africa [3] Ventureburn [4] TechCrunch [5] African Business Magazine
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