Kenya’s dominance as Africa’s startup capital held in 2025, attracting $984 million (Sh126 billion) out of the $3.28 billion (Sh423.12 billion) of capital inflows into the continent.
This was a 30 per cent share, outpacing major African markets including Egypt, South Africa and Nigeria.
New data by Africa: The Big Deal, a US-based newsletter that tracks startup funding across the continent, shows that capital raised in Kenya accounted for a third of total startup funding in Africa last year.
Egypt came a distant second, attracting $614m (Sh79.21 billion), just about 20 per cent of the total capital inflows.
South Africa which attracted $599million (Sh77.27billion) and Nigeria $343million (Sh44.25 billion) closed the top four destinations for investor capital.
“Financing for Kenya’s startups grew by 52 per cent year-on-year with debt funding emerging as the preferred choice for investors. Debt funding attracted $582 million (Sh75.08 billion), representing 60 per cent of the total raised, while equity funding stood at $383 million (Sh49.41 billion), nearly doubling year-on-year,” shows the report.
Of the $3.2 billion raised by start-ups in Africa in 2025, 82% went to the ‘Big Four’. In total, 28 markets were home to at least one deal over $100,000 (Sh12.9 million) last year.
Kenya’s almost billion-dollar capital inflows topped the charts as on most funding an individual market has attracted in a single year since 2022.
The strong performance was largely driven by energy-focused startups such as d.light, Sun King, M-Kopa, Burn and PowerGen, reflecting sustained investor interest in off-grid energy and climate solutions.
However, the number of large deals declined. A total of 75 Kenyan ventures raised $100,000 or more in 2025, ranking the country third on this metric, but representing a 23 per cent year-on-year drop–the weakest performance among Africa’s “Big Four” startup markets.
Kenya’s strong showing has been attributed to a supportive policy environment, high investor confidence, widespread smartphone adoption and the growing role of startups in addressing local challenges across sectors such as energy, finance and agriculture.
Kenya’s growth propelled Eastern Africa as the continent’s leading destination for venture funding in 2025, a significant shift in Africa’s investment landscape that has been building over the past four years.
Eastern Africa accounted for 34 per cent of all capital raised across the continent in 2025, overtaking all other regions.
Western Africa followed with 24 per cent, while Northern Africa captured 23 per cent. Southern Africa accounted for 19 per cent of total funding, with Central Africa attracting a marginal 0.1 per cent share.
The regional distribution closely mirrors patterns observed in 2024, although Western Africa registered a modest decline from 27 per cent to 24 per cent.
The longer-term trend, however, highlights a dramatic rebalancing of Africa’s venture capital map. In 2021, Western Africa was the undisputed leader, attracting 48 per cent of all funding on the continent.
At the time, Southern Africa followed at a distant 23 per cent, while Northern and Eastern Africa each accounted for 14 per cent.
Four years on, Eastern Africa has moved from the middle of the pack to the top, reflecting growing investor confidence in markets such as Kenya, Ethiopia and Rwanda.
Despite Eastern Africa’s dominance in total capital raised, Western Africa retained a narrow lead in deal activity.
In 2025, 29 per cent of ventures that raised at least $100,000 were based in Western Africa, compared with 27 per cent in Eastern Africa. Northern Africa accounted for 23 per cent of such deals, while Southern Africa represented 18 per cent. Central Africa again lagged, with just 2 per cent of ventures raising funding above the $100,000 threshold.
Beyond the leading markets, Senegal raised Sh20.2 billion, Benin Sh12.9 billion, Rwanda Sh3.2 billion and Mali Sh2.3 billion in startup funding during the year.
by JACKTONE LAWI
