Fintech once again led investment activity, making up half of total private equity and venture capital inflows in Q1, propelled by Africa’s mobile-first economy and innovative business models that bypass traditional financial infrastructure.
DealMakers Africa, a South African-based firm that tracks mergers and acquisitions (M&A) and corporate finance activity across the continent, disclosed that among the quarter’s top transactions was a $53 million raise by LemFi, underscoring the continued appeal of digital financial services.
The genesis of fintech’s success across the continent, especially payment providers such as Paystack, M-Pesa, Moniepoint, Mukuru, Momo Money, and Flutterwave, is primarily due to the advances made in the telecommunications industry.
However, unlike previous quarters, the biggest deals were spread across a wider range of industries, from mining and heavy industrials to agriculture and fundraising platforms. This reflects the continent’s increasingly diverse investment landscape, even in a period of overall slowdown.
Private equity investments in Africa fell to their lowest level in at least four years in the first quarter of 2025, as global investors grappled with the uncertainty of Donald Trump’s return to the White House and lingering macroeconomic headwinds.
Data from DealMakers Africa showed that 75 deals worth $2.16 billion were recorded between January and March.
That represents a 41 percent drop in value from the same period in 2024, when 125 deals totaling $3.67 billion were announced, and a 78% decline compared with Q1 2020, when 202 deals worth $9.81 billion were reported.
“The return of Donald Trump to the US presidency early in the quarter introduced uncertainty and recalibration in US-Africa investment dynamics,” said Marylou Greig, Editor at DealMakers Africa.
Greig added that in the remaining quarters of 2025, M&A is likely to be influenced by whether the US clearly defines its Africa policy. “Until such time, activity will likely remain subdued and inconsistent.”
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Analysts note that Trump’s first presidency was marked by a reduced emphasis on Africa compared with his predecessors. His return has sparked questions over US policy priorities at a time when the continent is already navigating weak currencies, high inflation, and fragile capital flows.
Despite the overall downturn, the report said East and North Africa accounted for more than half of all transactions in the quarter, underlining their position as investment hubs. Kenya remained East Africa’s anchor, with 12 deals largely in financial services, healthcare, and agritech.
“Tanzania and Uganda drew increased interest in infrastructure, manufacturing, and logistics, while the region’s energy transition also boosted deal activity in solar, wind, and hydro projects.
“In North Africa, Egypt was the standout performer, registering 14 deals. Morocco and Tunisia followed with four and three transactions, respectively, with financial services, logistics, consumer goods, and fintech drawing the most attention from investors.”
West Africa’s activity was dominated by Nigeria, which accounted for nearly two-thirds of the region’s deals, supported by its large market and dynamic startup ecosystem, the report noted.
