After two bruising years of declining investment, Africa’s tech ecosystem has clawed its way back. According to Partech Africa’s 10th annual Africa Tech VC Report, the continent raised $4.1 billion in combined equity and debt financing in 2025, a 25% year-on-year increase and the ecosystem’s strongest performance since 2022. But if you’re expecting a repeat of the frothy, euphoric 2021 boom, the data tells a very different story.
Debt Stole the Show
The most consequential trend of 2025 wasn’t a surge in venture capital; it was the quiet, structural rise of debt financing. Debt funding reached $1.6 billion, up 63% from 2024 and spread across 107 deals, an all-time high for the continent. Debt now represents 41% of all capital invested in African tech, compared to 31% in 2024 and just 17% in 2019.
This isn’t a sign of distress. It reflects maturity. Startups with predictable revenue streams are increasingly bankable, and investors are responding accordingly. Debt is no longer a cyclical or marginal complement to equity, but a structurally embedded financing layer in the African tech ecosystem. Equity funding, by comparison, grew a more modest 8% to $2.4 billion across 462 deals. It is stable, but no longer the dominant engine.
Kenya Leads, South Africa Surges Back
Four ecosystems (Kenya, South Africa, Egypt and Nigeria) captured 72% of total capital, confirming the persistence of a hub-driven landscape. Within that group, however, the dynamics shifted in interesting ways.
Kenya ranked first overall with $1.04 billion raised, driven by its strength in debt instruments and energy-linked startups like d.light, Sun King, M-KOPA, Burn, and PowerGen. The catch: while big companies got bigger, smaller ones struggled. The number of Kenyan startups raising at least $100,000 fell 23%, suggesting capital is concentrating at the top and leaving early-stage founders exposed.
South Africa’s return was arguably the more surprising headline. It reclaimed full leadership in equity investment for the first time since 2017, topping both funding and deal count. This was supported not by a handful of exceptional transactions but by consistent, broad-based deal flow.
Beyond Fintech: A Broader Ecosystem Emerges
For years, African tech investment was effectively a fintech story. That’s changing. Fintech remained the largest sector, but its share of total equity funding fell sharply from 60% in 2024 to 32% in 2025. Cleantech was the standout performer, nearly doubling to $1.18 billion, up 99% year-on-year. Enterprise software, e-commerce, and healthtech each crossed $200 million in annual equity funding for the first time since the 2021–2022 boom.
The significance of this isn’t just numerical. These sectors are growing during a normalized, selective market, which suggests the underlying business models have earned genuine investor conviction.
The Cracks Beneath the Recovery
Not everything is rosy. The Seed+ stage continues to struggle, with funding decreasing by 4% as investors without local presence have largely exited the market. The pipeline of early-stage companies is thinning. Female-founded startups saw more deal activity but continued to attract a relatively small share of overall capital. The $4.1 billion figure is genuinely encouraging, but it rewards scale over experimentation, incumbents over newcomers.
