The Nigerian startup ecosystem continues to suffer a slump in venture funding in 2025, as Kenyan startups dominated Africa’s impressive $550 million raise in July 2025. While 61 startups across the continent were responsible for the total, two Kenyan clean energy startups claimed 83% of the total. raise.
Sun King closed a $156 million securitisation to scale an affordable solar energy supply across Kenya. The local currency deal (KES 20.1 billion) will enable an estimated 1.4 million low-income households and businesses to access electricity — often for the first time — and shift away from costly, polluting fuels like kerosene and diesel.
The deal, considered the largest securitisation ever completed in Sub-Saharan Africa outside South Africa, was structured by Citi with Stanbic Bank Kenya Ltd and also backed by five international and local commercial banks and three development finance institutions.
Similarly, d.light expanded its receivables financing by $300m, bringing the total raised by the two powerhouses to $456 million.
Despite significant improvement in the African venture funding space, the contribution of Nigerian tech startups continues to decline. This was quite similar to the first half of last year, when Nigeria suffered a drought, languishing behind Kenya and Egypt for the most part.
The ecosystem would eventually jolt out of its slumber with two major raises in the latter part of the year, one of which was Moniepoint’s unicorn-making raise.
This year, however, Nigeria finds itself languishing behind all the Big 4, with no signs of a rebound. With Nigeria renowned as the equity funding headquarters of Africa, and with investors appearing to favour debt over equity, Nigerian startups may have longer still to endure.
This is particularly so considering that equity funding into early-stage startups has declined considerably, possibly due to the preference for debt financing.
See also: Nigerian startups raised $26m of over $300m in equity by African startups in Q2 2025
The Nigerian startup ecosystem was for long the most-preferred investment destination in Africa. It has, however, lost that to Kenya over the last two years, and now it appears to be sliding even further.
2025 is on course to beat 2024 funding
2025 continues to be an impressive one for venture funding in Africa as 61 startups across the continent raised $550 million in July. This represents an impressive 50.6 per cent increase from the $365 million raised in the previous month.
Indeed, the $550 million raised last month effectively makes July 2025 the most-funded month in two years. It also brings total investment recorded in 2025 to nearly $2 billion ($1.95 billion), putting it well on course to outperform 2024 when startups across the continent raised $2.2 billion.
While the continuous rise in venture funding is a positive trend, it is, however, worrying that most of the July funding came in the form of debt, as equity funding continues to drop. Indeed, of the $550 million raised last month, $493 million came in the form of debt financing. This represents 89 per cent of the funding raised on the continent last month.
It also brings the total debt financing rate to 45 per cent since the beginning of the year, up from the 28.5 per cent total debt funding as of June. For emphasis, 33 per cent of the total funding by this time last year (2024) came in the form of debts. In 2023, 38 per cent of the funding raised by this time came in the form of debts.
Despite the drop in equity funding, and despite raising only $58 million in equity in July, representing the second-slowest equity month of 2025, the continent still managed to hit the $1 billion equity funding milestone in July.
This means that the milestone was achieved faster this year than in 2024, when it was achieved in October and in 2023, when it was achieved in June.
Technext Newsletter
Get the best of Africa’s daily tech to your inbox – first thing every morning.
Join the community now!
