Investment News in Africa — Q2 2025 Review and Q3 2025 Outlook

Q2 2025 showed a tentative recovery in Africa’s private capital markets: deal volumes were modestly up, while the largest-ticket activity continued to concentrate in fintech and energy. A few mega-deals dominated headline value, while IPO chatter increased as governments signaled privatization programs to refill domestic capital markets. East Africa stands out as a region with strong macro tailwinds but persistent capital gaps, especially seed/Series A funding and institutional follow-on capital in markets such as Ethiopia. These gaps are creating both friction and opportunity, with missing mid-stage capital and sector-specific growth capital being the main bottlenecks preventing more regional unicorns.

Method & Timeframe

This brief uses public Q2 2025 private capital and market reporting and targeted reporting on headline transactions and policy moves covering 1 April–30 June 2025. Key national policy calendar items through July 2025 were used to form the outlook.

Top Deals (Q2 2025)

1. Wave (Senegal) — $137M debt financing (June 2025)

Wave raised approximately $137 million in debt to scale its mobile money expansion, one of the largest single fintech financings in H1 2025. The round was structured as debt to fuel working capital and rapid market roll-outs.

2. Energy and infrastructure PE deals

Two large energy deals accounted for a significant share of private market value in H1 2025, concentrating headline deal activity.

3. Other fintech and growth financings

Fintech continued to attract the largest share of deal counts and value among startups in H1 2025, with several multi-million-dollar tickets across East and West Africa.

IPOs and Capital Markets Activity

Kenya privatization signals — The government announced plans to privatize state assets and bring the Kenya Pipeline Company (KPC) to the Nairobi Securities Exchange via IPO later in the year. This could stimulate local investor engagement and provide exits for PE and strategic buyers.

Overall IPO environment — Africa’s listing pipeline remains thin, but some governments and corporates are planning IPOs to deepen local capital markets. Country-led IPOs, especially state asset sales, are expected to be the main source of primary-market deals in East Africa.

Private Equity & Institutional Investments

Energy and infrastructure deals dominated headline value, while PE activity outside energy remained constrained.

Ethiopia has been issuing its first investment banking licenses and new startup law movements, gradually enabling more formal PE/VC deployments and local capital market activity.

East Africa Spotlight

Kenya

• Robust macro outlook with strong GDP growth projections.
• Privatizations and potential IPOs could stimulate domestic markets.
• Fintech and agritech remain key sectors, though domestic primary-market liquidity is limited.

Ethiopia

• Institutional reforms such as investment banking licenses and startup policy movements increase investor interest.
• Seed-to-growth capital shortages, regulatory friction, and limited local LPs continue to challenge early-stage startups.

Rwanda, Uganda, Tanzania

• Growing interest in digital payments, logistics, and off-grid energy, but scale remains limited.
• Policy and fiscal shifts influence investor appetite, particularly in Uganda and Tanzania.

Capital Gaps

• Mid-stage (Series A/B) funding shortage.
• Limited local institutional LP participation.
• Low IPO cadence and thin secondary markets.
• Regulatory uncertainty in frontier markets like Ethiopia.

Potential Unicorn Pockets in East Africa

• Payments & consumer fintech — Mobile money and low-cost payment platforms with strong unit economics.
• Distributed energy / off-grid renewables — Solar and microgrid platforms with predictable cash flows.
• Logistics & supply-chain platforms — Platforms solving last-mile distribution in agribusiness and e-commerce.
• Healthtech & Edtech — Ventures combining B2B contracting with B2C products.
• Telecom-linked innovations — Services leveraging existing telecom infrastructure for scale.

Outlook for Q3 2025

• Expect a modest increase in headline deal value with continued concentration in energy and fintech deals.
• Kenyan privatizations may catalyze domestic capital markets.
• Ethiopia will attract cautious investor interest, with small venture rounds and strategic corporate investments.
• Potential unicorns include fintech platforms, energy solutions, logistics marketplaces, and scalable healthtech/edtech ventures.

Practical Recommendations

For Investors

• Target Series A/B in East Africa to capture outsized value in high-potential startups.
• Use blended instruments combining equity and concessional debt to bridge capital gaps.
• Engage with domestic policymakers to accelerate IPO-ready pipelines and exits.

For Policymakers

• Deepen domestic LP channels to mobilize patient capital.
• Clarify startup-friendly regulations while strengthening oversight.