Nigeria’s standing among Africa’s leading startup markets weakened sharply in 2025, even as the continent recorded a rebound in disclosed venture funding.

Data from Briter’s Africa Investment Report 2025 shows that African startups raised $3.8 billion during the year. Nigeria accounted for just 8 per cent of that total, ranking last among Africa’s four largest startup ecosystems by funding share. South Africa led with 32 per percent, followed by Kenya at 29 percent and Egypt at 15 per percent.

This represents Nigeria’s lowest relative performance since 2019 and highlights a notable shift in how investor capital is being allocated across the continent.

From Market Leader to Lagging Share

For years, Nigeria dominated Africa’s startup landscape by deal value, driven by its large population, strong fintech adoption, and early success in attracting global venture capital. The 2025 figures suggest that dominance has weakened.

Despite recording the highest number of startup deals in Africa last year, Nigeria saw limited participation in large, late-stage funding rounds. Most activity occurred at the early stage, indicating that while new startups continue to emerge, fewer are reaching the scale required to attract substantial growth capital.

Moniepoint’s $90 million Series C extension stood out as one of the country’s few significant transactions in 2025.

Growth-Stage Capital Concentrates Elsewhere

In contrast, Kenya and South Africa attracted a higher concentration of growth-stage investments, while Egypt continued to secure sizeable rounds, particularly in capital-intensive sectors.

According to Briter, funding patterns across Africa are becoming increasingly uneven. A growing share of capital is being directed toward a smaller number of companies and markets, reinforcing disparities between ecosystems.

Nigeria has been particularly affected by this shift, as macroeconomic challenges have reduced the appetite for large equity investments.

Macroeconomic Pressures and Investor Caution

Several factors have weighed on Nigeria’s ability to attract late-stage funding, including persistent currency volatility, broader economic uncertainty, and a gradual reduction in foreign investor exposure over recent years.

Since 2021, Nigeria’s relative share of startup funding has declined steadily, even though deal activity has remained comparatively high. This divergence points to structural challenges in scaling startups beyond early traction.

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Sector Trends Across the Continent

Fintech and digital financial services remained the most funded sector in Africa in 2025, both by deal volume and total capital raised. This continued Nigeria’s historical strength in the category.

However, climate-focused innovation emerged as the fastest-growing sector, raising more than three times its 2024 total. Solar energy accounted for a large portion of this growth, with much of the capital flowing into markets offering clearer infrastructure frameworks and more predictable investment returns, particularly South Africa and Kenya.

Artificial intelligence attracted growing investor interest during the year, though funding largely favored applied use cases with near-term commercial potential rather than deep research and development.

Across Africa, fewer than five per cent of deals exceeded $50 million in size. Despite their rarity, these large transactions accounted for roughly half of all disclosed funding, underscoring how a small number of late-stage rounds continue to shape overall funding outcomes.

What the Decline Signals for Nigeria

Nigeria’s shrinking funding share among Africa’s leading startup markets does not necessarily point to a slowdown in innovation. Instead, it suggests an ecosystem that remains active at the early stage but struggles to produce companies that mature into large, capital-attractive ventures.

Without improved macroeconomic stability and stronger pathways to growth-stage financing, Nigeria risks expanding the number of startups in its ecosystem while seeing fewer reach the scale needed to anchor long-term investor confidence.