African Startup Funding Slows in August as Investors Pull Back
African venture capital swings sharply in August
African startups secured $93 million in August 2025, marking one of the quietest months for venture funding this year. According to data from Africa: The Big Deal, 33 startups closed deals worth at least $100,000, with Nigeria, Egypt, and Kenya accounting for the bulk of activity.
The month’s total represents an 83% plunge compared to July, when startups raised $550 million, most of it through debt financing. Yet the August numbers are 66% higher year-on-year, compared to $56 million in August 2024. The result is a picture of volatility rather than decline, as Africa’s venture market continues to adjust to shifting investor preferences.
From debt-heavy July to equity rebound
The most notable development was the return of equity funding. Roughly three-quarters of August’s capital came from equity deals, while debt accounted for the remaining quarter. This marks a reversal from July, when debt dominated with $493 million in loans and credit facilities.
Analysts say the equity rebound offers some relief for founders, many of whom have been concerned that debt is crowding out equity in African venture capital. Equity provides growth capital without immediate repayment pressures, while debt can saddle startups with liabilities in uncertain markets.
Still, debt remains significant. Since January, nearly 45% of African startup funding has come via debt, up from about one-third at the same point in 2024. Investors appear to be balancing both instruments, suggesting that the funding mix is in transition rather than permanently tilted toward one side.
Nigeria, Egypt, and Kenya dominate deal flow
Nigeria recorded two of August’s most notable rounds. Koolboks, a solar-powered cooling company, raised $11 million in Series A funding, blending equity, debt, and grants. Backers included KawiSafi Ventures, Aruwa Capital, and All On, with debt support from FFEM and bpifrance, alongside grants from Innovate UK, Shell Foundation, and IKEA Foundation’s PREO programme. The company plans to scale production and build its first assembly plant in Nigeria.
Also in Nigeria, Chowdeck, a food delivery and quick commerce platform, raised $9 million in a Series A led by Novastar Ventures and Y Combinator. Angel investors included Paystack co-founders Shola Akinlade and Ezra Olubi. The startup is expanding operations across Nigeria and into Ghana.
Kenya’s highlight was Hewatele, a health-tech company focused on medical oxygen supply, which secured $10.5 million from AfricInvest’s Transform Health Fund to build a large-scale liquid oxygen plant.
In Egypt, Breadfast, a grocery and e-commerce startup, raised $10 million in a Series B led by Novastar Ventures with backing from the European Bank for Reconstruction and Development. The company plans to expand fulfillment centers across multiple cities and scale its payments service, Breadfast Pay. Egyptian fintech valU also added $9 million through a securitised bond issuance, underscoring the role of alternative financing models.
Together, Nigeria, Egypt, and Kenya accounted for 75% of August’s capital raised, reaffirming their role as Africa’s leading venture markets.
Outlook: subdued but resilient
August’s total may appear soft next to July’s debt-fueled spike, but it is far from the weakest point of 2025. March remains the slowest month of the year, with just over $50 million raised. Importantly, the number of startups securing funding remains consistent with 2023 and 2024, suggesting that investor appetite has not collapsed.
So far in 2025, African startups have raised more than $2 billion, with equity and debt almost evenly split. If momentum continues, funding could surpass 2024’s totals, making 2025 the first year of growth after two consecutive annual declines.
The key question is whether the continent can cross the $3 billion mark by year-end. That would require startups to raise another $1 billion in the final four months, a challenging but not impossible target.
August reflects a market recalibrating rather than retreating. Equity’s resurgence is encouraging for founders wary of piling on debt, while the dominance of Nigeria, Egypt, and Kenya highlights where investors see the strongest opportunities. With four months left in the year, the African venture story is less about decline and more about transition, as startups and investors adjust to a new funding landscape.
