In the African venture capital landscape, the first half of 2025 is unfolding with an unusually quiet rhythm. While startups continue to jostle for capital amid difficult economic headwinds, a noticeable slowdown in launches of new venture funds is setting the tone for the year.
According to data tracked by Launch Base Africa, the continent has so far witnessed few completely new entrants into the fund manager space. Most announcements have come from existing venture capital firms raising follow-on funds — many of which were conceived or launched prior to 2025.
Old Names, New Closures
Foundation Ventures, a Cairo-based venture capital firm, is among those doubling down. In February, it secured $25 million for the first close of its second fund, FVFII. The fund is focused on early- and growth-stage startups and is part of the firm’s continued strategy to strengthen Egypt’s increasingly sophisticated startup ecosystem while reaching across African markets.
Another Egyptian outfit, P1 Ventures, marked the final close of its first institutional fund, securing $50 million. The fund brings its total assets under management to over $60 million. While this is a significant signal of commitment to African tech, it is not a fresh launch but rather the maturation of a fund several years in the making.
The pattern holds across the continent. Saviu Ventures, a Francophone Africa-focused firm, announced a €25 million second close for its Saviu II fund — again, a continuation. Similarly, Nigeria’s LoftyInc Capital Management, well-known for early bets on Flutterwave and Andela, raised $43 million in the first close of its third fund.
In Senegal, Teranga Capital is preparing to expand its micro private equity strategy beyond its borders with an initial CFA 2 billion ($3.4 million) in new capital. The firm plans to back early-stage businesses in underinvested West African countries like Mauritania, Guinea-Bissau, and Cape Verde.
A Corporate-led Pivot
What’s emerging is not the absence of capital per se — but a reshuffling of who is providing it. Much of the novelty in 2025’s venture activity has come from corporate-backed or development-finance-linked vehicles rather than pure-play VC firms.
One example is GB Foods, which launched GB Hub Africa, a $10 million seed-stage social impact fund targeting innovations in food systems. The goal: transform how food is produced and distributed across the continent while improving livelihoods.
Similarly, the Dutch entrepreneurial development bank FMO has joined forces with Village Capital and the Netherlands Enterprise Agency (RVO) to back the Africa Ecosystem Catalysts Facility (AECF). The initiative, with a modest $4 million in commitments so far, is focused on bridging the capital gap for early-stage businesses in Nigeria, Ghana, and Tanzania — markets where venture investment often trails behind need.
A Quieter 2025 Compared to 2024
The scarcity of first-time fund announcements stands in stark contrast to the same period last year. In the first half of 2024, several ambitious vehicles were launched. Ring Capital expanded its “Generations” impact model to Africa through Ring Africa, a €50 million fund anchored in Francophone West Africa with a dedicated team in Abidjan.
Around the same time, Egypt’s Sawari Ventures unveiled a $150 million vehicle, outlining a multi-sector strategy focused on sustainability, innovation, and long-term value creation. In South Africa, the emergence of Conducive Capital, backed by a founding team with more than R300 million in early-stage investments and a return profile above 30%, also illustrated growing confidence in the continent’s startup ecosystem.
By comparison, 2025 is subdued — an environment shaped in part by lingering macroeconomic pressures, a global retrenchment in tech investing, and the increasing complexity of fundraising in frontier African markets.
Raising a First Fund Remains Daunting
For many first-time African fund managers, the reality is even starker. Raising an inaugural venture fund is often more marathon than sprint. A recent report, Unlocking Capital for Emerging Female Investment Vehicle Managers in Africa, sponsored by the German development agency GIZ, peels back the layers of this grueling process.
The study reveals that many investment vehicle managers (IVMs) must bootstrap their way into credibility. Nearly half of established IVMs made over 10 investments out-of-pocket or via angel capital before even attempting to raise a fund. Most spent more than 18 months — and often more than two years — building a credible investment track record.
Gender disparities exacerbate the challenge. Female-led investment firms tend to raise smaller ticket sizes and take longer to close each investment, reflecting not only systemic barriers but also persistent biases among institutional backers.
There is cautious optimism that structural support could ease the journey. A growing chorus of ecosystem stakeholders is calling for warehousing facilities — temporary holding vehicles for pre-fund investments — as well as legal and compliance support to streamline the fund formation process.
Some progress has been made. Development finance institutions are increasingly recognizing the need to build Africa-based investment capacity rather than channeling capital exclusively through non-African intermediaries. But systemic reform remains slow, and success stories remain the exception rather than the rule.
An Ecosystem in Waiting
The African venture capital story in 2025 is one of consolidation over acceleration. While seasoned players remain active — and corporate capital fills some of the early-stage void — aspiring fund managers are still navigating a steep, unforgiving terrain. With inflation and currency risk continuing to cloud outlooks in key markets, risk appetite from global LPs remains muted.
And yet, the continent’s fundamentals have not changed: a growing, youthful population; increased digital adoption; and rising demand for homegrown solutions across sectors from climate to finance to logistics. The ideas are there. The entrepreneurs are ready. What’s missing — at least for now — is a surge of fresh capital to back the next wave.
Until then, African venture capital may continue to tread water in 2025, waiting for the next tide to rise.
Further reading: