Kenya’s tech ecosystem in 2025 experienced a notable shift in investment patterns, a report has revealed. According to The African Tech Startups Funding Report 2025, the total funding for ventures based in Kenya grew despite fewer startups successfully raising capital.
19 Kenyan startups secured funding in 2025, representing 10.7 per cent of the African total and ranking the country fourth on the continent.
This marked a 32.1 per cent drop from 28 startups in 2024, which had accounted for 14 per cent of Africa’s total, and continued a multi-year downward trend that began in 2022.
Despite the decline in deal volumes, total funding for Kenyan startups rose slightly to $273.2 million, up 9.3 per cent from $249.9 million in 2024.
“A small improvement, then, but Kenya still lags behind the rest of the so-called “big four” for total
funding after years of decline,” the report reads.
The average funding per startup increased sharply to $14.38 million, up from $8.93 million in 2024, highlighting a trend toward fewer but larger investments concentrated on more established ventures.
Kenyan startups secure highest sector-specific funding
Sector trends in Kenya reveal a strong divergence between deal count and capital allocation. Fintech ventures accounted for 26.3 percent of funded startups, ahead of mobility (15.8 percent), logistics (10.5 percent), and energy, e-health, and agri-tech (10.5 percent each).
However, when it comes to total funding, energy dominated. Energy startups secured $201 million, representing 73.6 percent of Kenya’s total funding for 2025.
Logistics and mobility followed with 6.5 percent and 5.3 percent of total funding, respectively, while fintech accounted for only 3.7 percent.
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Debt financing remains a hallmark of Kenya’s startup ecosystem. Approximately 26.3 percent of funded ventures included some debt in their funding rounds, a figure comparable to 28.6 percent in 2024.
The report explains that Kenyan ventures access more debt than regional peers because “energy and mobility companies are suited to, and indeed often require, debt financing” to scale infrastructure-intensive operations.
Gender diversity among Kenya’s funded startups remains a concern. Only three of the 2025 ventures, or 15.8 percent, had at least one female co-founder, down from nine in 2024 and 26 in 2023.
The same three ventures had female CEOs, slightly higher than the 14.3 percent reported in 2024.
“Compared to peers, Kenyan ventures access more debt capital, with this due to the fact energy and mobility companies are suited to, and indeed often require, debt financing,” the report adds.
“Three (15.8%) of 2025’s funded ventures have at least one female co-founder, down from 9 (32.1%) in 2024, and 26 (41.9%) in 2023. The same three have a female CEO, with the 15.8 per cent share marginally up on 14.3 per cent in 2024.”
Across Africa, the tech ecosystem showed significant recovery from the so-called “funding winter,” with total capital raised increasing 46.2 percent to $1.64 billion, despite a decline in the number of funded startups to 178.
African startup funding rebounds
Nigeria remained the continent’s best-funded market, raising $464.8 million, or 28.4 percent of total investment.
Fintech dominated Nigerian funding, accounting for 64.2 percent of deals, with notable rounds for Moniepoint and LemFi.
Egypt led the continent in deal volume, funding 43 startups and maintaining leadership in e-commerce and e-health.
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South Africa rebounded dramatically, raising $335.9 million and emerging as the continent’s leader in artificial intelligence, capturing nearly half of all African AI investment.
Sector-wide, fintech remained the most popular, with 54 startups raising nearly $700 million. Artificial intelligence investments surged 250 percent to $48.3 million, while e-commerce funding grew 70 percent to $66.85 million.
Mergers and acquisitions nearly doubled to 23 deals, with South Africa accounting for 39.1 percent of these transactions, followed by Egypt and Nigeria.
Accelerators and incubators continued to play a critical role in channeling capital, with 49.4 percent of funded ventures participating in programs such as Y Combinator, Techstars, and 500 Global.
Gender diversity across Africa remains low, with only 16.9 percent of funded startups featuring at least one female co-founder.
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