September 2025 underscored a bounce back for Africa’s venture capital landscape, following August’s slowdown — signalling that the continent’s funding recovery is gaining structure. While the number of deals and ticket sizes remain below pre-2022 highs, the steady rebound in equity participation, coupled with renewed regional activity and improving macroeconomic signals, reflects a market gradually regaining its footing.
Founders report that during fundraising, they face tougher questions about revenue, burn rate, and timeline to break even. This discipline is healthy: it weeds out weaker models and encourages realistic business building. For instance, many startups have cut extra costs and optimised operations – those that survived 2023’s funding crunch are emerging leaner and more efficient. Investor sentiment has clearly shifted from risk aversion to cautious re-engagement. The quality of deals being closed — often infrastructure-driven, capital-efficient, and supported by local syndicates — indicates growing market maturity. This evolution from momentum-driven funding to fundamentals-driven investment may ultimately prove healthy for the ecosystem’s long-term resilience.
Economically, easing inflation across key economies, stabilising currencies, and selective policy reforms are setting a more supportive backdrop for startups. The next phase of growth will depend on governments’ ability to deepen digital policy frameworks, strengthen capital markets, and sustain macroeconomic stability.
If current trends hold, Africa’s startup ecosystem is on course to close between $2.8 billion and $3 billion, effectively marking a solid rebound from 2024 levels. More importantly, it signals a shift toward measured, sustainable growth, characterised by more disciplined capital deployment, better alignment between local and global investors, and greater focus on long-term value creation.
Investor Sentiment: Investor sentiment has shifted from cautious pessimism to selective optimism. The September figures, particularly the strong Q3 performance, indicate that capital is available, but it is highly discerning. Investors are prioritizing profitability and efficiency, utility over hype and startup maturity
Venture Funding Outlook: With over $2.2 billion raised year-to-date, 2025 is on track to exceed the total funding for 2024, signalling a strong recovery trend. There is an expectation that non-fintech sectors like AI, Climate-Tech, Health-Tech, and Infrastructure will continue taking a larger share of the capital in Q4 2025.
Key Themes and Wildcards: African-domiciled VCs and corporate venture arms are taking a larger share of deal participation — helping offset slower global capital inflows. This is deepening regional resilience and fostering smaller but more consistent rounds.
Macroeconomic trajectory: Egypt’s inflation easing (Sep 2025), Kenyan policy easing (Oct 2025), and some sovereign financing initiatives suggest improving macro headwinds in parts of Africa — a positive for risk appetite. Conversely, political events (e.g., Morocco protests) and sovereign borrowing needs (Nigeria) remain watch points. VCs will price for market-specific risk.
The End of AGOA: In a recently published piece, Maya Horgan Famodu argues that the quiet end of AGOA reflects a broader shift in global influence across Africa. She notes that AGOA symbolized U.S. trust and partnership with the continent, and by letting it expire, Washington has created space for China, the EU, and Gulf states to expand their presence. For Maya, the real loss is not economic but diplomatic — in a world where true power belongs to nations that stay consistently engaged.
