ABAN says Africa’s startup funding recovery is “more grounded” than previous peaks
After three years of decline from the 2021 peak, African startups raised $3.4 billion in 2025, a 32% rebound from the previous year.
After three years of decline from the 2021 peak, African startups raised $3.4 billion in 2025, a 32% rebound from the previous year. But beneath that headline lies a less-discussed shift.
Angel participation has recovered after two years of caution, and deals below $1 million, one of the few segments of the market that has expanded steadily since 2019, continue to grow.
For the African Business Angel Network (ABAN), an industry body representing angel investors across the continent, the growth validates a decade of work to organise Africa’s local angel base.
Since 2015, ABAN has served as a bridge for the continent’s angel investment ecosystem and now links more than 5,000 angel investors through 75-plus member networks across 37 African countries and the diaspora. Its 2025 Angel Investment Survey Report, released this month in partnership with the United Nations and Japan’s Ministry of Foreign Affairs, is the closest thing the ecosystem has to an audit of how early-stage capital moves on the continent.
The report found that 62 angel networks deployed at least $4.4 million in disclosed funding in 2025, with 65% of the startups they backed securing follow-on capital. Over 90% of individual angels are now writing cheques below $25,000, up from 76% in 2024, a compression that reflects both shifting risk appetite and the depreciating currencies most of these angels operate in.
What makes the findings worthy of discussion now, rather than at any other point in the past three years, is the structural question underlying the rebound. International capital is retreating, and the cheap-money era that fuelled 2021 and 2022 is no longer today’s reality.
If the early-stage layer of the African ecosystem is to hold, it will be because local and diaspora angels, organised through networks like ABAN’s, can move faster and write more cheques than they have historically.
For this week’s Ask an Investor, I spoke to Favour Ubaka, one of the report’s creators and a stakeholder engagement officer at ABAN, to understand why angel deal participation rebounded in 2025 after a two-year decline, and what a $5,000–$10,000 cheque actually buys a founder in a market where the naira has lost more than 70% of its dollar value since 2022.
This interview has been edited lightly for clarity and length.
First, we are seeing early-stage funding become active again after a period of caution across the ecosystem. Many investors became more conservative in 2023 and 2024 because of global economic uncertainty, currency pressures, and the broader venture capital slowdown.
But in 2025, there was renewed confidence around early-stage innovation, particularly around startups that could demonstrate traction and real market demand.
Second, local and diaspora investors are stepping in more intentionally. One of the strongest signals from the report is that angel investing in Africa is no longer being driven only by external capital. We are seeing more African founders, operators, executives, and diaspora professionals participating in angel investing. These investors understand local markets better and are often more willing to take early bets on African founders.
Third, the ecosystem itself is becoming more organised. Angel networks are more structured today than they were a few years ago. We now have stronger syndication models, matching funds like Catalytic Africa, investor education programmes, and vehicles like ABAN helping angels invest across borders more efficiently. All of this reduces friction and gives investors more confidence to participate in deals.
What is also interesting is that the rebound is not only happening in the traditional “Big Four” markets anymore. We are increasingly seeing activity in ecosystems like Zambia, Ghana, Senegal, Uganda, and Tanzania. This tells us the ecosystem is slowly becoming broader and more distributed across the continent.
What we are seeing is a bit of a split story. The $3.8 billion headline is still largely driven by bigger, later-stage rounds. But underneath that, sub-$1 million deals have been quietly growing and becoming more consistent since 2019.
So while they don’t dominate the total capital deployed, they make up a significant share of deal activity. In simple terms, most of the money is concentrated at the top, but most of the activity is happening at the early stage.
And compared to earlier periods like 2021 and 2022, the market leaned more towards larger rounds. What we are seeing now is a stronger, more active early-stage layer, with angels and angel networks continuing to fund that first cheque.
That is really what sustains the pipeline.
I would not describe the uptick as fragile, but I would say it is still early and very dependent on how the ecosystem continues to respond to current conditions.
What we are seeing in 2025 is not just a rebound driven by external capital coming back in. In many ways, it is being supported by a stronger foundation, particularly local investors, diaspora participation, and more organised angel networks stepping in at the early stage.
At the same time, the macro headwinds are real. We have seen reduced activity from some international funding sources, tighter global liquidity, and broader economic uncertainty. Those factors have not gone away.
But what is interesting is how the ecosystem is adjusting. Early-stage activity, especially below $1 million, has remained active and continues to grow. Angels are still writing those first cheques, and in many cases, they are filling gaps where larger capital has pulled back.
So rather than fragile, I would describe this as a more grounded recovery. It may not be as fast or as headline-heavy as previous peaks, but it is being built on more consistent early-stage activity and stronger local participation.
The real test going forward is whether we can keep mobilising domestic and diaspora capital and continue building the structures that make it easier for angels to invest. If that continues, the uptick becomes something much more sustainable.
A big part of it is how investors are managing risk in the current environment.
With more uncertainty in the market, many angels are choosing to write smaller cheques so they can spread their capital across more startups instead of concentrating it in a few bets. It is a bit like not putting all your eggs in one basket. That shift naturally brings average ticket sizes down.
The second thing is the stage at which angels are coming in. We are seeing more activity right at the very early stage, pre-seed and early traction. At that point, founders are not raising large rounds yet, so smaller tickets are more appropriate.
