Nigerian Startups Lead May Funding Despite Continent-Wide Decline

African startups received $135 million in funding during May, with Nigerian companies accounting for a significant portion of the total. LemFi led the way with $30 million raised—representing 22.2% of the month’s total and highlighting Nigeria’s continued dominance in the African tech landscape.

Funding Trends Across the Continent

While May showed a 23% increase from April’s $110 million, it marked a substantial 47% decline compared to May 2025 when startups raised $254 million. This downturn extends beyond a single month, with year-to-date funding at $843 million—a 16% drop from the same period last year.

The slowdown reflects broader challenges in global venture capital markets and may indicate a shift towards more selective investment strategies among international funders.

Key Deals of May

Beyond LemFi’s impressive Series B extension, several other notable deals emerged:

• Nala (Tanzania) secured $50 million in debt financing from Liquidity through Mars Growth Capital to fuel its global expansion and neobank development.
• BFREE (Nigeria) closed a $10 million equity round led by AfricInvest to acquire non-performing loan portfolios and expand into new markets.
• Africa GreenCo (South Africa) also raised $10 million to further develop its renewable energy solutions.

These deals demonstrate continued investor interest in specific sectors like fintech and green technologies despite the overall market slowdown.

What This Means for African Tech

The current funding environment underscores the need for African startups to focus on sustainable growth models, operational efficiency, and demonstrating clear paths to profitability. While large rounds may be less frequent, targeted investments in high-potential companies are likely to continue—particularly those addressing critical market needs.

As competition for capital intensifies, startups will need to differentiate themselves through innovative solutions, strong teams, and demonstrable traction.