For much of 2024, investment into African tech froze as global headwinds and portfolio concerns took hold. But early 2025 sees a change: venture capital firms that had retreated are now cautiously returning. This resurgence, however, is characterized by a strategic prudence. Nearly 42% of the investments made by these previously “quiet” VCs are follow-on rounds, highlighting a focus on bolstering existing portfolio companies as they re-engage with the African market. This report delves into the individual strategies of these returning firms, exploring the contours of this cautiously optimistic new chapter for African tech funding.
Khwarizmi Ventures
Khwarizmi Ventures, known for its strategic focus on North African startups, was notably active in 2021 and 2022. During this period, the firm backed promising North African startups including logistics platform Pylon, e-commerce delivery service Bosta, and B2B e-commerce marketplace Chari.ma. However, 2024 saw a significant reduction in their investment activity.
In 2025, Khwarizmi Ventures has signaled a return to form with a significant follow-on investment in Khazna, an Egyptian fintech startup. Khazna’s recent $63 million funding round, where Khwarizmi participated alongside a mix of global and regional investors, demonstrates a renewed commitment to the Egyptian market and the fintech sector. This investment in Khazna, which is building on earlier pre-Series B funding, suggests Khwarizmi is doubling down on promising portfolio companies and maintaining its regional focus despite the broader market headwinds of 2024.
E Squared Investments
South Africa-based E Squared Investments, a prolific VC firm active during the 2021–2022 funding cycle, demonstrated a reduced funding activity in Africa in 2024. During its peak, E Squared supported South African startups spanning diverse sectors, including EdTech platform Excel@Uni, mobile engagement firm Mobiz, data automation specialists Synatic Data Automation, and mobility solutions provider GoMetro.
In early 2025, E Squared announced a significant return to local investment with a R126 million ($6.7 million) tranche of a Series A funding round for Khula!, an Agritech startup. This investment, a follow-on from existing shareholders including major corporates like Absa Group and PepsiCo, points to E Squared’s continued conviction in the potential of technology to transform South Africa’s agricultural sector. This move suggests a strategic focus on essential sectors and a preference for companies with proven traction, evidenced by continued backing from established investors.
LoftyInc Capital
Nigerian VC firm LoftyInc Capital was highly active in 2021 and 2022, building a diverse portfolio of African startups. Investments included logistics platform PAPS, restaurant management system Orda, influencer marketing platform Wowzi, and fintech ventures like Flex Finance and Payday. However, their activity noticeably slowed in 2024.
2025 marks a shift for LoftyInc, evidenced by its participation in a $3 million pre-Series A funding round for Egypt’s Widebot, an artificial intelligence startup developing an Arabic Large Language Model (LLM). This cross-border investment, alongside participation from Saudi and international investors, indicates a geographical expansion beyond Nigeria and a strategic move into the burgeoning AI sector. Furthermore, LoftyInc’s recent first close of its $43 million LoftyInc Alpha Fund, targeting a $50 million final close, suggests a renewed commitment to deploying capital in the African tech space, albeit with a potentially broader regional and sectoral focus.
Azur Innovation Partners
Moroccan VC firm Azur Innovation Partners experienced a downturn in funding activity in Africa during 2024. Previously, Azur had backed Moroccan startups including logistics platform Agenz, freight forwarding platform Cloud Fret, and e-commerce ventures like Epicerie Verte and Blink Pharma.
In 2025, Azur Innovation Partners has emerged as the lead investor in a $1.9 million pre-Series A funding round for ORA Technologies, a Morocco-based superapp. This investment, alongside another local VC firm Witamax, signals a strengthening of the Moroccan domestic investment ecosystem and a focus on companies driving digital and financial inclusion within the country. This activity suggests a renewed confidence in local innovation and a commitment to nurturing the Moroccan tech landscape.
KFW DEG
German development finance institution KFW DEG was a notable investor in African startups in 2021, backing ventures like pharmaceutical e-commerce platform DrugStoc, industrial IoT platform Guidewheel, and solar power provider Daystar Power. However, 2024 saw a conspicuous silence from the fund in terms of new African startup investments.
In 2025, KFW DEG has returned with a significant €50 million ($52.4 million) investment into the Facility for Energy Inclusion (FEI). This fund, managed by Cygnum Capital and focused on small-scale decentralized renewable energy (DRE) projects across Africa, represents a strategic shift towards infrastructure-focused investments addressing critical energy needs on the continent. This move highlights a potential pivot towards larger-scale, impact-driven projects aligned with sustainable development goals, reflecting a broader trend in development finance.
DOB Equity
Netherlands-based DOB Equity, an impact investment fund focused on East Africa, faced portfolio challenges in 2024, notably with the failures of startups like Sendy and Copia. Despite these headwinds, DOB Equity, which previously backed East African ventures including telemedicine platform Ilara Health, agricultural platform Twiga Foods, and recycling company Mr. Green Africa, has announced a renewed commitment to the region.
In January 2025, DOB Equity made its first investment under a revised strategy, backing Spouts International, a Ugandan company producing ceramic water filters under the brand Purifaaya. This investment signals a renewed focus on sustainable solutions and impact-driven ventures within East Africa. DOB Equity’s revised strategy, marked by this investment, suggests a shift towards more resilient and sustainable business models, potentially reflecting lessons learned from previous portfolio challenges.
4DX Ventures
US-based but Africa-focused VC firm 4DX Ventures, which had diversified geographically to North America in 2024, saw a reduced funding activity in the African tech space. Previously, 4DX had built a portfolio of notable African startups.
In 2025, 4DX Ventures has re-engaged with the African market, participating in a $6.75 million pre-Series B funding round for Egypt’s Taager, a social e-commerce platform. This follow-on investment, alongside other international and regional investors, suggests a continued interest in the Egyptian market and the social commerce sector within MENA.
Raed Ventures
Saudi VC firm Raed Ventures, a highly active investor in Africa with a portfolio including companies like SWVL, Aqarmap, and Trella, also diversified away from Africa in 2024, focusing primarily on the Middle East and US markets.
In 2025, Raed Ventures has signaled a return to African investment, again through a follow-on investment in Egypt’s Taager, participating in the same $6.75 million pre-Series B round as 4DX Ventures. This re-engagement with the Egyptian market, via a follow-on investment in a promising social commerce platform, indicates that while geographical diversification may have been a strategic priority in 2024, the firm is still actively monitoring and investing in select African opportunities, especially its existing portfolio there.
Rally Cap Ventures
US-based Rally Cap Ventures, which focused more on North and South American startups in 2024, has begun 2025 with a notable African investment. Rally Cap, with previous African portfolio companies including Mono, Kippa, and Termii, has led a $3.5 million seed funding round for Guinean fintech startup Cauridor.
This investment in Cauridor, which is developing payment infrastructure to address cross-border payment inefficiencies in Africa, marks a re-entry into the African market for Rally Cap and a specific focus on the fintech sector and cross-border solutions. This move suggests a strategic bet on the growing importance of cross-border payments within the African continental trade landscape.
Breyer Capital
California-based Breyer Capital, which focused more on North American startups in 2024, is also signaling a return to African investments in 2025. Breyer Capital, with a previous African portfolio including prominent companies like Sokowatch, mPharma, and Yoco, participated in the $6.75 million pre-Series B round for Egypt’s Taager.
This follow-on investment in Taager, alongside other international firms, indicates Breyer Capital’s renewed interest in the African tech space and particularly the Egyptian market. This move suggests that while domestic opportunities may have been prioritized in 2024, the firm remains committed to identifying and supporting high-growth ventures within the African continent.
Flourish Ventures
While Flourish Ventures itself may have seen a quieter period in direct African investments in 2024, 2025 is witnessing renewed activity through its subsidiary, Madica. Flourish Ventures previously backed notable African startups like Apollo Agriculture, FairMoney, and MaxAB.
Madica has recently announced a series of investments in diverse African startups: Tanzanian telehealth platform Medikea, Egyptian femtech company Motherbeing, Tunisian e-mobility startup Pixii Motors, and Moroccan AI-powered voice analytics platform ToumAI. This activity through Madica signals Flourish Ventures’ continued commitment to the African ecosystem, potentially utilizing a subsidiary structure to manage and deploy capital in the region. Madica’s portfolio reflects a broad sectoral interest, spanning healthcare, mobility, and AI across different African regions.
Enza Capital
Kenya-based Enza Capital experienced a sparser investment activity in 2024. Enza Capital, which built a strong portfolio between 2020 and 2022, including ventures like Tuteria, Tugende, and SeamlessHR, also faced portfolio losses with the failures of Sendy and Copia.
In 2025, Enza Capital has re-emerged with an investment in Egypt’s Widebot, participating in the same $3 million pre-Series A round alongside LoftyInc Capital and others. This investment in Widebot, an AI startup, points to a renewed interest in the Egyptian market and the AI sector, mirroring trends seen with other returning VCs. Enza’s re-entry, despite recent portfolio challenges, suggests a resilient commitment to the African tech space and a willingness to adapt and explore new sectors.
Cautious Optimism and Strategic Deployment:
The re-emergence of these previously “silent” VCs paints a nuanced picture of the African tech investment landscape in 2025. While the frenetic pace of 2021–2022 may not immediately return, this renewed activity provides a vital injection of capital and a signal of underlying confidence in the continent’s potential.
However, the experiences of 2024 have likely instilled a more cautious and strategic approach. VCs are demonstrably prioritizing follow-on investments. Geographical diversification remains a factor, but key markets on the continent are attracting renewed attention, particularly within sectors like Fintech and AI.
The African VC winter may be thawing, but the emerging season appears to be one of strategic deployment and measured optimism. The return of these “silent” VCs, each with their refined approach, suggests a more sustainable and resilient phase of growth for the African tech ecosystem, focused on long-term value creation and impactful innovation.
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