Nigerian Web3 startups raised $43 million in 2025, but growth remains early

Nigeria’s Web3 startups, including crypto, blockchain, and stablecoin-based fintechs, raised $43 million in 2025, doubling the previous year’s figure, according to a report by Hashed Emergent, an India-based venture capital firm that backs early-stage African startups.

The report, Nigeria Web3 Landscape Report 2025, shows that while capital is returning, it is heavily concentrated: 89% of funding—about $38 million—went to finance products tied to stablecoin use cases, such as payments and fiat-crypto exchanges. Early-stage deals accounted for $13 million, with most activity clustered around pre-seed and seed rounds, underscoring the limited depth of growth capital.

Series A funding returned modestly in 2025 after a slowdown the previous year, with its first deal in two years, according to the report.

The rebound masks an ecosystem still dominated by early-stage bets and a narrow focus on stablecoin-driven payments. That imbalance points to a market still in its formative phase, where startup formation is accelerating faster than scale capital.

“A wave of stablecoin-focused startups is driving increased investment activity across the ecosystem,” said Tak Lee, chief executive officer and managing partner at Hashed Emergent. “This momentum led finance to dominate. Consumer adoption has also surged, further cementing Nigeria’s position as a global stablecoin hub.”

The funding concentration mirrors a wider shift in Nigeria’s crypto market away from speculation toward utility. Stablecoin adoption is driving much of the activity, with deposits growing more than 9,000% between 2018 and 2025, while on-chain transaction value rose 56% year-on-year to $92 billion, according to the report.

Despite the rebound, the deal volume still tilts to traditional funding avenues, signalling that global venture capital attention has yet to fully return to Nigeria’s Web3 sector.

Nigerian Web3 startups recorded 82 deals in 2025, up from 72 in 2024, according to the report. Yet, 73 of those deals were grants, with just one Series A round recorded in 2025. The remaining deals were spread across seed, pre-seed, and token sales, highlighting the early-stage skew and reliance on crypto-based funding rounds.

Sector performance also fell short in 2025. While the finance sector dominated, infrastructure-first startups, including those building stablecoin rails, developer, and payment interoperability tools, raised only $4 million in 2025, down from $11 million recorded in 2024, their peak in the last five years, the report noted.

Nigeria’s Web3 entertainment sector, including gaming and social apps, declined to $1 million, down by 50% from 2024.

Investor interest remained concentrated around stablecoin infrastructure, cross-border payments, and crypto-fiat withdrawal services, with limited appetite for emerging categories like gaming, creator platforms, or AI-driven infrastructure.

Crypto usage patterns are also changing. Withdrawal and deposit volumes for both fiat and crypto declined in 2025, signalling a cooling in speculative trading activity, according to the report.

More Nigerians are using digital currencies, especially stablecoins, for remittance payments. According to the report, remittance flows between Nigeria and other countries expanded rapidly across intra-African and global corridors, recording transfers to and from Ghana, Kenya, the UK, Canada, China, and parts of Europe.

Stablecoins are functioning as a payment rail rather than a store of value. The report shows that Nigerians recorded an 83% withdrawal-to-deposit ratio on exchanges; out of every $100 received in wallets, about $83 is quickly withdrawn, signalling that stablecoins are becoming money in transit, as users treat them as payment and transactional means, rather than savings.

Across Africa, regulators in countries like Kenya, Ghana, and Rwanda are moving toward formal oversight of digital assets. Nigeria has also shifted toward regulation after years of sidelining crypto firms from accessing the formal financial system. Yet, clarity remains uneven.

Nigeria’s Investment and Securities Act, passed in March 2025, formally recognised digital assets as securities under the oversight of the Securities and Exchange Commission (SEC).

However, a February Virtual Asset Regulatory Authority (VARA) white paper introduced a broader approach for crypto oversight. Nigeria created the Virtual Asset Regulatory Council (VARC), a multi-agency coordinating body for non-security virtual assets not under the SEC’s purview, including payment tokens, exchange tokens, stablecoins, utility tokens, and other digital representations of value.

The country designated the Central Bank of Nigeria (CBN) Governor and the Executive Chairman of the Nigeria Revenue Service (NRS), the country’s tax authority, as co-chairs of the agency, overseeing payment-linked activities in the digital asset sector.

On March 31, the CBN launched a supervisory pilot programme to monitor activities of stablecoin issuers, exchanges, and stablecoin-based payment processors—including Flutterwave and Paystack—for compliance with anti-money laundering (AML) and counter-terrorism financing standards.

According to both the Investments and Securities Act (2025) and the VARA white paper, the SEC retains authority over tokenised securities. Yet, the capital markets regulator has also raised minimum capital requirements for Digital Asset exchanges (DAXs), which operate businesses tied to fiat-crypto withdrawals and payments, and now have to meet a ₦2 billion ($1.4 million) capital threshold.

Digital Asset Custodians responsible for safeguarding users’ crypto assets are also subject to the same ₦2 billion ($1.4 million) capital requirement, raising entry barriers and deepening uncertainty around fragmented policies and the scope of regulatory oversight.

“While progress on regulation has been slower than expected, the foundation of the ecosystem remains strong, driven by resilient founders and builders who continue to create, adapt, and push the space forward,” said Lee. “There are clear signs of progress, with increased engagement between stakeholders and regulators. One thing is clear: Nigeria remains an anchor for Web3 and blockchain adoption in Africa.”

With over 110 startups and more than $170 million raised since 2020, according to the report, Nigeria remains one of Africa’s most active Web3 hubs.

Yet, the structure of its latest funding cycle suggests a more nuanced reality: a fast-growing ecosystem still searching for the capital depth needed to scale, even as it continues its long walk to regulatory clarity for operators.