African Startups Now Get 40% of Funding From Local Investors

Africa's tech scene just hit a major milestone: local investors are backing their own startups like never before.

In 2025, African investors provided nearly 40% of all startup funding on the continent, jumping from just 25% three years earlier. While global investment dropped from $5 billion to $2.3 billion during that same period, local investors maintained steady support, proving that Africa's tech future is increasingly homegrown.

The shift matters because local fund managers bring something money alone can't buy: deep knowledge of African markets. They understand which products will actually work, which business models fit local needs, and how to navigate challenges that look invisible from overseas.

Take Moniepoint, Nigeria's newest unicorn startup. The company relied heavily on Nigerian venture capital firms for both funding and strategic advice as it expanded nationwide. That local expertise helped turn a business-focused payments company into a consumer powerhouse.

"The key is having a healthy mix of local fund managers who understand the markets and can provide geographically relevant advice, which is hard to do from abroad," said Kola Aina, founder of Lagos-based Ventures Platform.

The growth of African investors didn't happen by accident. Development organizations like the International Finance Corporation backed African venture capital firms through programs designed to strengthen local investment capacity. As these funds matured, wealthy individuals across the continent also started investing directly in startups and local funds.

The Ripple Effect

When local investors back African startups, they're not just deploying capital. They're investing in their own communities and economies, creating networks that help the entire ecosystem grow stronger.

African high-net-worth individuals bring business experience, local connections, and genuine commitment to building lasting companies. "When they invest, they're investing in their communities, their economy, and their legacy," explained Marge Ntambi, venture partner at Benue Capital.

The broader picture looks encouraging too. African startups raised $3.6 billion in 2025, a 25% increase from the previous year across 635 deals. Deal activity jumped 43%, showing that investor appetite for African tech is rebounding, even if individual checks remain smaller than in peak years.

Challenges remain, particularly in getting growth-stage funding to promising startups. But the foundation is solidifying: more acquisitions (over 60 in 2025), more local capital, and more investors who understand that Africa's tech success story will be written by Africans.

As global investors come and go, Africa's homegrown investment community is building something more permanent.