African startup funding rebounds to $3.9bn

African startups secured $3.9 billion across 506 deals in 2025, marking a strong recovery in fundraising activity after a challenging period for the continent’s technology ecosystem, according to a new report by Bloomwit Africa.

The report showed that total technology funding surpassed $4 billion when equity and debt financing were combined, representing an estimated 25 per cent year-on-year increase. It noted that venture debt played an increasingly important role in providing startups with alternative sources of capital.

Bloomwit Africa, a public relations and communications firm, said the positive momentum has continued into 2026, with African startups raising $705 million in the first quarter, a 26.5 per cent increase compared to the same period a year earlier.

The report attributed the rebound to renewed investor confidence in Africa’s technology sector despite persistent global challenges affecting venture capital markets.

It noted that investment activity remained concentrated in major innovation hubs such as Egypt, South Africa, Kenya and Nigeria, while also expanding into other markets across the continent.

According to the report, the growing use of venture debt alongside traditional equity financing has broadened funding options for startups, helping businesses access capital needed for growth and expansion.

The report added that the wider distribution of investments across several African economies points to a more diversified funding landscape as investors increasingly explore opportunities beyond established startup ecosystems.

Bloomwit Africa said continued capital inflows into the technology sector are expected to drive innovation, accelerate business growth, create jobs and further strengthen Africa’s appeal as an emerging destination for global venture investment.