African startups raised $3.9bn across 506 deals in 2025, showing signs of stability in the continent’s venture ecosystem after two years of global market adjustment, according to the African Private Capital Association’s 2025 Venture Capital Activity in Africa report.
In a statement released on Monday, the African Private Capital Association (AVCA) said that although total capital deployment remained below the record highs seen in earlier cycles, deal activity stabilised during the year.
AVCA, the pan-African industry body that champions and enables private capital investment across the continent, noted that early-stage resilience, stronger domestic investor participation and the expansion of venture debt shaped the 2025 landscape.
“Deal volume rose four per cent year-on-year, making Africa the only global region where venture activity did not decline. Seed and early-stage deal activity expanded, with median deal sizes at both stages reaching multi-year highs, demonstrating stronger conviction at entry despite a more selective funding environment,” the statement said.
The report also highlighted shorter fundraising timelines from Seed to Series A, indicating more efficient early-stage progression for startups.
At the upper end of the market, eight megadeals were completed in 2025, raising a combined $1.3bn. These large transactions helped cushion the impact of weaker late-stage equity activity, which declined to its lowest level since 2020.
Domestic investor participation reached a record level during the year. African investors accounted for 45 per cent of total venture fund commitments, up from an average of 23 per cent between 2022 and 2024. The increase was driven mainly by corporates and African development finance institutions.
Although overall development finance institution participation fell by 27 per cent, its structure shifted towards localisation. African DFIs contributed 63 per cent of DFI capital deployed, reversing previous years when international DFIs dominated commitments. AVCA said domestic capital is increasingly positioning itself as a more durable anchor for innovation, reducing the ecosystem’s historic reliance on external funding sources and global sentiment.
One of the most significant changes recorded in 2025 was the continued growth of venture debt. Venture debt reached $1.8bn, nearly doubling year on year and extending a three-year upward trend. The report said debt financing has moved beyond being a complementary option to becoming a core component of startup funding, especially for growth-stage companies looking to extend runway, manage dilution and optimise capital efficiency.
This trend aligns Africa more closely with financing dynamics in more mature emerging venture markets. East Africa accounted for more than two-thirds of regional deal value linked to this growth.
Exit activity also strengthened. Venture-backed exits rose to a new high of 34 in 2025, marking a 31 per cent increase year on year. This outpaced the global growth rate of one per cent recorded during the same period. North Africa led in exit volume, while Southern Africa recorded the largest share of exit value at $288m.
Trade sales remained the dominant exit route, accounting for more than 70 per cent of both exit volume and value. Financial sponsors increased their participation and reached a new high in 2025, particularly in mature sectors such as FinTech. Africa-based buyers accounted for 54 per cent of exits, signalling a growing base of local and regional acquirers alongside continued international involvement.
Commenting on the findings, the Chief Executive Officer of AVCA, Abi Mustapha-Maduakor, said, “The African venture capital ecosystem is recalibrating towards patient, structured, and locally anchored capital. The record-breaking domestic participation and exit activity we see shows that African investors are increasingly confident in backing homegrown businesses and achieving exits, providing strong validation of the ecosystem’s long-term investability.
“The priority now is to continue supporting the industry in diversifying its allocation pool to ensure adequate funding reaches the investors backing high-growth startups across the continent.”
