At the start of 2025, I published a set of predictions about where Africa’s technology ecosystem was headed after one of its toughest years on record. Funding in 2024 had fallen to roughly $2.2bn, startup failures were mounting and foreign capital had largely retreated. The question was not whether the ecosystem would change, but how.
With most of 2025 now behind us, it is possible to test those forecasts against events as they unfolded. This is not an exercise in self-congratulation, but an attempt to understand what the past year reveals about the structure, resilience and direction of African tech.
Four predictions framed the outlook: a rebound in funding, continued startup shutdowns, a gradual stabilisation of the ecosystem and a cautious return of foreign investors. Broadly, those expectations have held. The details, however, are where the story becomes more instructive.
Funding Rebounded — Unevenly, but Clearly
The first prediction was that funding activity would recover from the 2024 trough. On aggregate, it has. By year-end, total capital deployed into African tech startups is on track to exceed 2024 levels by more than $1bn.
The rebound did not arrive evenly across sectors or geographies. Instead, capital concentrated around a small number of large, conviction-driven rounds. Deals involving companies such as Moniepoint, Stitch and Egypt’s Nawy accounted for a disproportionate share of total funding. These were not speculative bets, but later-stage investments into businesses with proven revenues, regulatory clarity and regional scale.
Perhaps the most symbolically important development was the first meaningful venture capital transaction in Angola. The Anda deal was modest in absolute terms, but significant in what it represented: a tentative expansion of venture capital into markets long considered peripheral. For founders in underserved ecosystems, it offered a reminder that Africa’s tech map is not fixed — merely slow to change.
This pattern explains why the recovery felt less exuberant than headline figures might suggest. Funding returned, but it did so with sharper filters and fewer beneficiaries.
Shutdowns Continued, Despite the Thaw
The second prediction — that startup closures would persist — proved uncomfortable, but accurate. Many observers assumed that once funding conditions improved, the wave of failures would subside. It did not.
The year opened with an external shock: the dismantling of key parts of the US international aid apparatus, including USAID. The consequences rippled quickly through Africa’s startup and accelerator ecosystem, particularly in climate, health and agriculture, where blended finance and grant-linked capital had played an outsized role.
In Kenya, insolvency notices became a regular feature of national journals. Companies such as SolarNow, CityTaps and SureChill Africa entered bankruptcy or restructuring processes. Several accelerators and venture builders quietly wound down operations as US-backed programmes were withdrawn.
Beyond aid-linked fallout, purely venture-backed startups also fell. Okra, Lipa Later, Sendy spin-offs, Medsaf, Bento Africa, Afristay, IrokoTV and others shut down or significantly scaled back. These were not early experiments, but companies that had raised substantial capital in previous cycles.
The common thread was not simply lack of funding, but fragile unit economics, aggressive expansion strategies and delayed paths to profitability. In that sense, 2025 functioned less as a funding winter and more as a reckoning.
A More Stable — and More Public — Ecosystem
The third prediction was that, taken together, the ecosystem would begin to stabilise, with more successes than failures. This, too, broadly held.
One of the clearest signals came from public markets. Africa experienced one of its busiest years for tech-related IPOs in recent memory. Egypt’s Valu made a high-profile debut on the Egyptian Exchange. South Africa’s Optasia confirmed its unicorn status through a landmark listing. In Morocco, fintech Cash Plus delivered one of the most striking IPOs of the year on the Casablanca Stock Exchange, reportedly attracting demand worth billions of dollars and achieving massive oversubscription.
What stood out was not only the scale of these offerings, but their composition. In Morocco’s case, retail investors — ordinary citizens rather than institutions — accounted for much of the demand. That matters. It suggests a growing domestic appetite for technology businesses and a gradual shift away from reliance on foreign exits alone.
Stability also showed up in mergers and acquisitions. 2025 became a record year for startup-led consolidation. Newly funded companies moved quickly to acquire competitors or adjacent platforms. Transactions included Nawy’s acquisition of SmartCrowd, Stitch’s purchase of Efficacy Payments, LemFi’s acquisition of Pillar, Peach Payments buying PayDunya, and MaxAB-Wasoko acquiring Fatura.
Alongside these were larger, more traditional deals. Nedbank finalised its acquisition of iKhokha for about $94m. Other notable transactions involved Bank Zero, AZA Finance and Walletdoc. For early-stage investors and angels, these exits marked a rare period of liquidity after several lean years.
Foreign Capital Returned — Selectively
The fourth prediction concerned the return of foreign investors. That return has been real, but cautious.
International funds once again led several major rounds, particularly in fintech and payments. Deals involving Raenest, Stitch and others reflected renewed US and European participation. This influx of foreign capital was a key reason total funding volumes exceeded 2024 levels.
However, the character of that capital differed sharply from the 2021 boom. Investors were more valuation-sensitive, more sector-focused and more insistent on governance and compliance. The days of broad-based, momentum-driven Africa funds appear to be over, at least for now.
Political and macroeconomic factors also played a role. Shifting US policy priorities, persistent global uncertainty and higher-for-longer interest rates all shaped investor behaviour. Africa was no longer a frontier to be chased indiscriminately, but a market to be re-entered selectively.
What the Scorecard Really Shows
Taken together, the past year suggests that the African tech ecosystem has entered a more sober phase — neither boom nor collapse, but something closer to equilibrium. Capital is available, but narrower in scope. Failure is no longer treated as an anomaly, but as part of the market’s clearing mechanism. Exits, while still limited, are no longer theoretical.
For angel investors and early-stage backers in particular, 2025 has been one of the more rewarding years in recent memory. Startup-led acquisitions, secondary transactions and a handful of meaningful M&A outcomes provided long-awaited liquidity after several difficult vintages. For this cohort, the joke circulating quietly across the ecosystem — that “Detty December is assured” — carries an element of truth.
At the same time, the scorecard underlines how uneven the recovery has been. Gains accrued to a relatively small group of disciplined founders and patient investors, while weaker models were exposed and flushed out. The ecosystem rebounded, but on stricter terms.
As attention turns to 2026, the central question is not whether African tech will grow, but how — and who will be positioned to benefit. Capital can return quickly. Credibility and time are far harder to earn. That, perhaps, is the most enduring lesson of 2025.
