DFP Africa Startup Brief (May 2025)
Africa’s startup ecosystem often remains opaque to outside observers. The DFP Africa Startup Brief delivers curated updates on their fundraising, M&A activity, and other key developments—based on firsthand information gathered on the ground by DFP staff based in Africa—accompanied by expert commentary and analysis.
<Summary of May 2025>
- In May 2025, 23 African startups successfully raised a total of USD 277 million. The cumulative amount raised from January to May 2025 reached USD 952 million, representing an approximately 30% increase compared to the same period last year. A closer look at the deals in May shows that the “Big Four” countries—Nigeria, Kenya, South Africa, and Egypt—continued to dominate, accounting for around 80% of the total number of deals. Notably, Nigerian startups stood out at the seed stage, while Egyptian startups were particularly prominent from Series A onwards.
- Four M&A transactions involving African startups were publicly reported in May. The breakdown includes cross-border expansion within Africa by companies in the same industry, domestic consolidation within individual countries, and notably, in Egypt, an exit via SPAC listing. From January to May, the total number of M&A transactions reached 35, up 52% compared to the same period last year. Egypt, in particular, saw a sharp increase in acquisition activity, with 12 deals involving Egyptian startups—nine domestic and three by international acquirers.
1. African Startup Fundraising Trends (Based on Disclosed Transactions)
In May 2025, 23 African startups successfully raised a total of USD 277 million. The cumulative fundraising amount from January through May reached USD 952 million, representing an increase of approximately 30% compared to the same period last year.
Top 3 Largest Rounds
- Sun King (Kenya, Renewable Energy): USD 80M (Debt)
- Nawy (Egypt, Proptech): USD 52M (Series A)
- valU (Egypt, Fintech): USD 27M (Debt)
Investments by Japanese VCs
- Verod-Kepple Africa Ventures invested in Nawy (Egypt, Proptech, Series A)
- Uncovered Fund invested in Sylndr (Egypt, E-commerce, Series A)
Key Observations
- Stage-Specific Trends
There are many seed-stage startups in Nigeria, and many growth-stage startups in Egypt.
– Pre-Seed: Nigeria
– Seed: Nigeria (5), South Africa, Ethiopia
– Series A: Egypt (3)
– Series B: South Africa
– Series C: Egypt - Significant Debt Financing Activity
– Sun King (Kenya) – USD 80M
– valU (Egypt) – USD 27M
– Nawy (Egypt) – USD 23M
(Debt providers included IFC, Saudi Investment Bank, Sanabil Investments, and various Egyptian banks.) - E-Mobility Growth
Emerging electric vehicle (EV) startups demonstrated strong momentum:
– Pobad International (Ghana, undisclosed amount)
– ARC Ride (Kenya, USD 5M)
– Zero Carbon (South Africa, USD 5.6M)
2. African Startup M&A Activity (Based on Disclosed Transactions)
In May 2025, four M&A deals involving African startups were reported, bringing the year-to-date total to 35 transactions—marking a 52% YoY increase.
| Case | Commentary by DFP |
|---|---|
| Announcement date: May 6, 2025 Acquirer: Bio-lite (Kenya, Renewable Energy) Acquiree: Baobab+ (Senegal, Renewable Energy) Deal value: Undisclosed | A U.S.-founded startup based in Kenya, which develops, manufactures, and sells home solar products, is expanding into West Africa. Leveraging the financial and technical expertise of Baobab+, the company could further refine its PAYG (Pay-As-You-Go) model. By integrating product development, distribution channels, and financing, the startup may aim to strengthen its overall competitiveness. |
| Announcement date: May 19, 2025 Acquirer: MaxAB-Wasoko (Egypt/Kenya, E-commerce) Acquiree: Fatura (Egypt, E-commerce) Deal value: Undisclosed） | A leading e-commerce startup serving small and medium-sized retailers in Egypt and Kenya has acquired a local Egyptian platform that connects wholesalers with retailers. The acquisition may expand the acquirer’s ecosystem, enhance its value chain—particularly through credit offerings—and help shift away from price-based competition. |
| Announcement date: May 19, 2025 Acquirer: Catalyst Partners Middle East (Egypt, SPAC) Acquiree: Qardy (Egypt, Fintech) Deal value: Undisclosed | An Egyptian fintech startup exited through a merger with the first Special Purpose Acquisition Company (SPAC) to be listed following the establishment of a SPAC framework by Egypt’s Financial Regulatory Authority (FRA). This case is groundbreaking as it suggests the potential institutionalization of SPAC listings as a viable exit route in the future. |
| Announcement date: May 23, 2025 Acquirer: PSG Group (South Africa, Investment Firm) Acquiree: ButtaNut (South Africa, Manufacturing) Deal value: 54% equity stake | One of South Africa’s largest private investment firms acquired a health-food D2C brand specializing in nut- and seed-based products. |
There has been a noticeable rise in the number of Egyptian companies involved in the African startup M&A activity since the beginning of 2025, both as acquirers and as acquirees. Of the 12 Egyptian startups acquired so far this year, nine were bought by other Egyptian firms, while the remaining three were acquired by two companies based in the UAE and one in the UK. The recent SPAC merger in Egypt, which resulted in the first exit through a SPAC listing, has drawn attention as a potential catalyst for unlocking new exit opportunities for African startups in local capital markets.
Contact
Double Feather Partners Inc.
Insights & Strategic Planning Department – Satoshi Nakagawa <insight@doublefeather.com>
Disclaimer
This document has been prepared by Double Feather Partners Inc. solely for informational purposes and does not constitute an offer, solicitation, or recommendation to purchase, sell, or hold any specific securities, financial products, or investment strategies. The opinions, forecasts, and views expressed herein reflect the judgment of the author(s) at the time of publication and are subject to change without notice. While efforts have been made to ensure the accuracy and completeness of the information contained in this report, no guarantee is provided. Readers are advised to make investment decisions at their own discretion and responsibility.