Nigeria, once the undisputed king of African tech, ended 2025 in a humbling fourth place. While the continent’s total funding rebounded to $3.1bn, Nigeria captured just $410.1m of that pie. It was overtaken by Kenya ($933.6m), South Africa ($625.7m), and Egypt ($430.0m). For a country that dominated in 2021 and 2022, this collapse marks a structural shift rather than a temporary lull.
Our data reveals a stark contrast in what Nigeria funded versus what its competitors prioritized. While Nigerian founders struggled for basic equity, competitors in Nairobi and Cairo were busy building the “financial machinery” — debt, securitization, and local bank participation — that allowed them to pull ahead.
The Mega-Round Drought
Moniepoint accounted for Nigeria’s largest disclosed round in 2025, raising a $90m Series C extension late in the year. Beyond that deal, large financings were scarce: LemFi’s $53m round to expand its remittance business was the next biggest, followed by Kredete’s $22m Series A in late Q3 and OmniRetail’s $20m raise. With the exception of Moniepoint, Nigeria’s pipeline of mega-rounds largely dried up.
Compare that to the rest of the “Big Four”:
- Kenya: Sun King finalized a massive $156m securitization deal backed by Citi and local commercial banks. BasiGo secured $42m in equity plus $17.5m in total debt from the DFC and BII.
- South Africa: Stitch raised $55m, while hearX closed a $100m merger/funding deal. The JSE even saw Optasia raise $345m in an IPO.
- Egypt: Nawy raised a $75m package ($52m equity + $23m debt). MNT-Halan issued $50m in corporate bonds in May, 2025 and another $71.4 million in October across various facilities.
Nigeria managed only a few deals above $20m. In contrast, Kenya and Egypt moved into the $50m–$150m bracket by mixing equity with sophisticated debt instruments.
What Actually Got Funded in Nigeria
The 2025 dataset shows activity, but a lack of concentration:
- Fintech: LEMFI ($53m), Kredete ($22m), Moniepoint ($110m), Raenest ($11m), Carrot Credit ($4.2m), Umba ($5m debt).
- E-commerce/Logistics: OmniRetail ($20m), Chowdeck ($9m), LagRide ($100m asset facility).
- Cleantech/Energy: Arnergy ($15m extension), Koolboks ($11m), Salpha Energy ($1.2m), Rana Energy ($3m).
- Healthtech: Platos Health ($1.4m).
The Problem: Nigeria funded companies across 10+ sectors but lacked “deep vertical” dominance. While 53% of all African funding by Q3 2025 went to Cleantech (led by Kenya), Nigeria remained stuck in a fintech-heavy model that lacked the asset-backed debt to scale energy projects.
The Local Investor Retreat
Nigerian investors participated but rarely led rounds above $5m. LEMFI’s $53m was entirely foreign-backed. Chowdeck’s $9m was led by the UK’s Novastar Ventures. Raenest’s $11m was led by QED Investors (USA). In fact, Nigerian VCs deployed more capital outside the country than at home.
Compare this to Egypt, where local capital (pension funds and state-aligned VCs like Egypt Ventures) accounted for nearly $215m in deal participation. Egyptian founders had a domestic “safety net” that Nigerian founders, dependent on the devaluing Naira and foreign sentiment, simply did not.
The Infrastructure Nobody Built
The biggest miss of 2025 wasn’t the lack of cash; it was the lack of instruments:
- The Bank Gap: Egypt has about five banks providing startup debt; Nigeria’s banking sector remained largely absent except for UBA’s $100m facility for LagRide, which was strictly asset-backed for vehicles.
- The Debt Deficit: Venture debt reached over $1bn across Africa in 2025. Senegal’s Wave alone captured $137m of that. Nigeria’s share of venture debt was negligible, forcing founders to take dilutive equity or stop growing.
- The Corporate Void: In Egypt, conglomerates like Elsewedy Capital are active, backing Octane (June 2025), Flend (July 2025) and $23 million Series A for Nawah Scientific (December 2025). In Nigeria, despite a few co-investments from Flour Mills of Nigeria, the “Big Three” (Dangote, BUA, Access Bank) have yet to deploy strategic venture capital at scale.
The macro environment explanation
Currency devaluation, inflation, and political instability affected investor appetite for Nigerian assets. The naira depreciated sharply through 2024–2025, making exits harder and returns uncertain for dollar-denominated funds.
Kenya maintained relative currency stability. South Africa’s rand, while volatile, trades in liquid markets with hedging instruments. Egypt’s pound devalued but the government provided some investor protections. Nigeria’s multiple exchange rates and capital controls created uncertainty foreign investors struggled to price.
Regulatory changes in fintech and crypto particularly affected Nigerian startups. Several companies faced unexpected policy shifts. Others dealt with new licensing requirements. The regulatory environment, once seen as permissive, tightened in ways that surprised founders and investors. Investors are still worried, even.
“A big thing we’re watching is the new tax bill in Nigeria that comes into effect on January 1st. There’s a huge capital gains tax for international investors in Nigeria. When you start to look at the risk of the market, potential currency devaluations over a 10-year holding period, and a capital gains tax that’s north of 20%, it starts to make the investment opportunities quite uninvestable. That’s something we were very disappointed about. Certain regulations have really been a shock to some of our investments and make investors like us look closer at the risk and reward opportunities,’’ Lexi Novitske, Norrsken22’s General Partner, told Launch Base Africa.
But macro challenges alone don’t explain the infrastructure gaps. Egypt faces worse inflation and currency instability but still built banking participation in startup financing. Kenya deals with political uncertainty but developed multiple sector-specialized VCs. The macro environment made things harder; the infrastructure deficit made them nearly impossible.
What founders did instead
Faced with limited domestic options, Nigerian founders took several paths visible in the data:
Relocated or structured foreign entities: Several companies with Nigerian operations raised through non-Nigerian entities or emphasized Pan-African or global positioning to access international capital.
Took heavily dilutive terms: Without domestic debt or multiple competing term sheets, founders accepted terms they might have negotiated better with more options.
Stayed small deliberately: Some companies that could have scaled chose to remain capital-efficient and grow slowly rather than face the dilution or relocation required for growth capital.
Pivoted to sectors with available capital or fire sale: The concentration of funding in fintech and cleantech partly reflects founder decisions to enter sectors where capital existed rather than where it should have existed. For those unable to pivot, 2025 became the year of the fire sale, as a “funding graveyard” emerged for startups like Kippa and Lidya that failed to secure the debt machinery available in Kenya or Egypt. These distressed M&A deals and “survival exits” saw founders selling for pennies on the dollar or accepting heavily dilutive terms just to clear liquidation preferences.
None of these outcomes are optimal. They represent rational responses to capital constraints rather than strategic choices made from abundance.
The Bottom Line
Nigeria’s decline is fixable, but it requires shifting from a “VC-only” mindset to a “Capital Markets” mindset.
- Debt is King: As seen in Kenya ($933.6m total), the future of African scale-ups is asset-backed debt and securitization.
- Institutional Learning: Nigerian banks need to move from 0% startup lending to pilot programs. Even $20m in structured debt would change the trajectory for mid-stage logistics and cleantech firms.
- Local Liquidity: Egypt’s $850m total market (equity + debt) was protected by government-backed “fund of funds” ($100m from MSMEDA). Nigeria has the iDICE program ($617m), but it only made its first major deployment into a private fund in late 2025.
The takeaway for 2025: Nigeria’s crisis isn’t a lack of talent; it’s a structural drought of the financial machinery needed to support scale-ups at the Series A and B stages. That this collapse occurred under a technology minister who was a quintessential ecosystem insider makes the 2025 performance one of the most disappointing in recent memory.