10 African startups that folded in 2025, A hard reset for the continent’s tech scene

Africa’s tech boom hit another reality check in 2025. As the continent’s startup landscape continues to expand, this year revealed the limits of rapid scaling in markets still wrestling with infrastructure gaps, currency volatility, and fickle capital flows. Several well-known and well-funded companies across fintech, healthtech, edtech, travel and logistics either shut down or paused operations, showing that pedigree and traction don’t guarantee survival.

Below I unpack the 10 notable shutdowns from 2025, what each startup did, why it struggled, and what their exits say about the health of the ecosystem. Names and key figures are preserved; the narrative and analysis are freshly structured for clarity.

what happened in 2025

• Sector most affected: Fintech (largest share of closures).
• Geography: 8 of the 10 shutdowns were Nigeria-based, highlighting both the country’s dominant startup activity and its exposure to market stress.
• Broader trend: The year saw fewer shutdowns and layoffs compared to 2024, suggesting the market correction may be moderating even as weak business models continue to fall away.

The startups (what they built and why they closed)

1. Joovlin Nigeria (Fintech / retail digitization)

Founded: 2019 Funding: $100,000 Founders: Kingsley Nwoos, Yusuf Olalere, Lucky Mark

Joovlin offered a single app for small suppliers and retailers to manage inventory, orders, and social commerce sales. It grew reasonably fast at first (2,000 vendors, 6,000 products), but stalled when it couldn’t turn usage into sustainable revenues or secure follow-on funding after a $100k seed from MEST Africa. Cash constraints forced a shutdown in January 2025.

Early product-market fit without a repeatable monetisation path is fragile, especially in low-margin distribution niches.

2. Edukoya Nigeria (Edtech)

Founded: 2021 Funding: $3.5 million Founder: Honey Ogundeyi

Edukoya ran live tutoring and curated K–12 content and was one of Africa’s headline edtech raises. At its peak it supported 80,000 students and logged millions of solved problems. But pervasive connectivity issues, device access gaps, and limited household purchasing power capped growth. Multiple pivots and failed deals culminated in closure in February 2025; remaining capital was returned to investors.

Edtech scale in Africa still depends on realistic assumptions about device penetration and household willingness to pay.

3. Bento Africa Nigeria (HR tech / payroll)

Founded: 2019 Funding: $2.3 million Founders: Ebun Okubanjo, Chidozie Okonkwo

Bento aimed to standardise payroll and HR across African markets. By early 2025 it was battling serious internal and compliance issues, unpaid pension obligations, tax irregularities, salary disputes and the collapse of engineering capacity. CEO Ebun Okubanjo resigned; the board paused operations to manage liabilities.

Fintech/HCM infrastructure plays involve heavy regulatory scrutiny; governance lapses can be existential.

4. Lipa Later Kenya (BNPL)

Founded: 2018 Funding: $16.6 million Founders: Eric Muli, Michael Maina

A marquee BNPL player in East Africa, Lipa Later scaled quickly after a large 2022 raise. However, debt accumulation, a costly 2023 acquisition (Sky Garden) and a failed late 2024 capital round left the business overleveraged. The company entered administration in March 2025.

Credit products are capital intensive; aggressive expansion without matched risk controls and funding diversity is risky.

5. Medsaf Nigeria (Healthtech / pharmaceuticals)

Founded: 2016 Funding: $7 million  Founder: Vivian Nwakah

Medsaf operated a marketplace connecting hospitals and pharmacies to verified drug suppliers to reduce counterfeit medicines. Despite working with 1,000+ hospitals and backing from Y Combinator and Techstars, the startup was hit by FX shocks, investor exits, a failed acquisition attempt and mounting debt, leading to closure in 2025.

Health supply chains are mission-critical but sensitive to foreign exchange and capital continuity. 

6. FanBants Nigeria (FanTech / fantasy sports)

Founded: 2021 Funding: $20,000 Founders: Wilfred Ndidi, Fola Folowosele, Ozoemena Chukwu

FanBants built fantasy competitions and "Gist Markets" for AFCON, NPFL and other entertainment verticals. The product reached 50,000+ Android installs and participated in the Techstars Minnesota Twins Accelerator. In 2025 it quietly shut down, with the founders giving limited public explanation.

Niche consumer entertainment apps can scale downloads but struggle to convert that attention into reliable revenue quickly.

7. Afristay South Africa (travel/accommodation marketplace)

Founded: 2006 Funding: $2.2 million  Founders: Oliver Bryant, Ric Meulemans

A long-time accommodation marketplace, Afristay saw demand collapse: by late 2023 it was booking only ~30 stays a month and running with a skeletal staff. The business closed in early 2025 after prolonged decline.

Travel marketplaces are highly correlated with broader economic cycles and are vulnerable to long drawdowns.

8. Lidya Nigeria (Digital SME lending)

Founded: 2016 Funding: $16.45 million Founders: Tunde Kehinde, Ercin Eksin

Once a continent-leading SME lender, Lidya underwrote fast, collateral free loans and claimed hundreds of millions in reviewed credit and ~$150M disbursed. Ambitious expansion into Poland and the Czech Republic (2020) increased operational complexity and cost. After exiting Europe and encountering funding headwinds, Lidya closed in 2025.

 International expansion can overload startups if unit economics and risk systems are not robust across markets.

9. Heroshe Nigeria (e-commerce logistics / shopping proxy)

Founded: 2019  Funding: $275,000  Founders: Osinachi Ukomadu, Chichi Ukomadu, Joseph Cobhams

Heroshe enabled Nigerians to buy goods from the US, UK and China through a logistics and proxy shopping service. As service and communication failures compounded in 2024, missing packages and surprise fees eroded customer trust, and the business shut operations in early 2025.

For logistics businesses, operational reliability is the primary product. Reputation damage is often irreversible.

10. Collect Africa  Nigeria (Payments orchestration)

Founded: 2021  Funding: $135,000  Founders: Abraham Ojes, Wale Martins

Collect Africa aggregated transfers, POS, QR, links and direct debits into one merchant dashboard, processing $4M+ for 5,000 businesses. The team pivoted away from the product by August 31, 2025, to focus on a new stablecoin project, Autospend, a strategic shift the founders framed as opportunity-driven rather than distress-driven.

Some shutdowns are strategic pivots; founders can redeploy learnings into new, potentially larger bets.

READMORE: The Tech Startup Fixing Africa’s Biggest Retail Export Headaches

What these exits reveal about Africa’s tech market

Market maturity through pruning:

Closures of recognizable names Lidya, Lipa Later, Medsaf shows capitalism at work: the ecosystem is maturing. Investors now prize clearer paths to profitability over pure growth narratives. That pruning can be painful but also healthy long-term.

Capital & currency fragility

Several failures traced back to funding shortfalls and FX volatility. Startups dependent on repeated foreign capital rounds or thin local margins are particularly exposed when macro conditions shift.

Sectoral lessons

• Fintech / lending / BNPL: Highest failure rate because credit products require deep capital, robust risk models and regulatory resilience.
• Marketplaces & logistics: Operational scale and trust are nonnegotiable.
• Edtech & consumer apps: User traction does not always equal monetisation.

Despite the closures, some indicators improved versus 2024: shutdowns were fewer and layoffs fell. M&A activity increased as smaller players consolidated with stronger operators — often as a survival tactic rather than premium exits.

Practical implications for founders and investors

• Cash runway > vanity metrics: Prioritize unit economics and long run cashflow over headline growth.
• Localise risk and currency strategy: Hedging, local currency products, and diversified funding sources reduce shock exposure.
• Operational discipline: Strong compliance, strong payments/collections processes and governance are must-haves in regulated sectors.
• Pick fights where margin exists: Heavy operational models (logistics, BNPL) demand either scale or differentiated margins to survive.

2025 was a sobering year, not an apocalypse. The shutdowns underline that Africa’s startup market is evolving, becoming more discerning and less tolerant of weak economics. That’s uncomfortable but necessary: only businesses that can survive real market pressure will thrive next. For founders, investors and ecosystem builders, the message is clear: build durable models, control cash, and don’t mistake growth for sustainability.