Venture funding into African startups has finally hit the $2 billion mark in 2025, as the year continues on its impressive run on the investment front. Recall that startups around the continent raised $550 million in July, making July 2025 the most-funded month in two years and also bringing total investment recorded in 2025 to $1.95 billion.
For emphasis, in 2024, startup funding only hit the $1 billion mark in July.
While August 2025 hasn’t been a particularly impressive month so far, it has, however, done enough to cross the $2 billion mark, thus putting 2025 well on course to outperform 2024 when startups across the continent raised $2.2 billion in the entire year.
This feat puts the year on par with some of the better-performing ones, as August was also the month when the $2 billion milestone was crossed in 2021 and 2023. In 2021, African startups would go on to raise a record-breaking $6 billion in funding, according to a Partech report. In 2023, the total funding raised was $3.2 billion, a total which would make a more realistic target for 2025.
Recall that venture funding into the continent crossed the $1 billion mark in May 2025, after just five months, signalling that the continent’s funding flow has begun to witness a new normal.
Similar to crossing the $2 billion mark, this feat was achieved in the same month in 2021, three months earlier than 2020 and six months earlier than 2019.
See also: Nigerian startups lag as Kenya dominates Africa’s $550m funding in July 2025
Startup funding: 2025 is an impressive year for Africans, so far
Taking a brief look at the continental startup investment run, African startups raised $289 million in January.
The tally slumped to $119 million in February, before Africa witnessed its largest monthly drop in venture funding in March, when startups raised $50 million, representing a colossal 58 per cent decline.
The numbers rebounded massively in April as funding grew to $343 million, representing a 586% increase and bringing the total funding at the time to $803 million. With the $254 million May raise, 2025 indicated an early potential to outperform 2024’s total of $2.2 billion.
In June, startups raised an impressive $365m in funding, closing the first half of the year with $1.4 billion. For emphasis, as of the first half of 2024, startups had only raised $800 million across the continent.
By implication, 2025 is the most impressive year for African startups as far as funding is concerned.
While the continuous rise in venture funding is a positive trend, it is, however, worrying that a large amount of the 2025 venture funding came in the form of debt, as equity funding continues to drop. Indeed, of the $550 million raised in July, $493 million came in the form of debt financing. This represents 89 per cent of the funding raised on the continent last month.
It also brings the total debt financing rate to 45 per cent since the beginning of the year, up from the 28.5 per cent total debt funding as of June. For emphasis, 33 per cent of the total funding by this time last year (2024) came in the form of debts. In 2023, 38 per cent of the funding raised by this time came in the form of debts.
In 2021, $5.2 billion of the reported $6 billion came in the form of equity funding, which means only 13.4 per cent of the total funding came in the form of debt.
Egypt and Kenya have dominated the funding space in 2025, followed by South Africa. Nigeria, which used to be the major winner, appears to be suffering a funding drought.
With Nigeria renowned as the equity funding headquarters of Africa, and with investors appearing to favour debt over equity, Nigerian startups may have longer still to endure. This is particularly so considering that equity funding into early-stage startups has declined considerably, possibly due to the preference for debt financing.