Table of Contents
In 2025, Africa’s technology sector witnessed a significant influx of capital, with total investments climbing by 33% to reach $3 billion. This surge marked a revival as companies secured funding rounds, completed acquisitions, and investors who had been cautious over the previous two years began actively deploying capital once again.
Yet, beneath these headline successes lay a series of deals that ultimately fell through, revealing the evolving dynamics of the continent’s startup landscape.
Several negotiations collapsed at the final stages, while others fizzled out after prolonged fundraising efforts ended without resolution. Some ventures unraveled publicly due to governance lapses or regulatory interventions. Collectively, these instances provide insight into the boundaries of the current market and highlight practices that are no longer tolerated.
Acquisitions as a Last Resort: When Survival Trumps Growth
For certain startups in 2025, acquisition talks were driven less by expansion ambitions and more by the urgent need to stay afloat.
Take Medsaf, a Nigerian startup focused on pharmaceutical supply chains. After exhausting its financial resources, the company entered acquisition discussions in late 2024, hoping a buyer would offer a lifeline. Unfortunately, the deal never materialized, and subsequent fundraising attempts also failed. Medsaf’s closure underscored the increasing difficulty of securing acquisitions once financial distress becomes apparent in African markets.
Similarly, Kenya’s Lipa Later, a buy-now-pay-later fintech, faced mounting challenges after acquiring the struggling e-commerce platform Sky Garden. Despite raising nearly $10 million by 2024 to fuel growth, the company’s financial strain persisted. Efforts to raise additional capital in early 2025 were unsuccessful, culminating in the company entering administration by March.
In a different scenario, Nigerian edtech startup Edukoya, which had initially attracted $3.5 million in a notable pre-seed round, ultimately shut down in February 2025. Despite exploring partnerships and merger opportunities to stabilize its business model, none came to fruition, highlighting that early funding alone cannot guarantee long-term viability without a clear strategic direction.
Silent Failures: Funding Rounds That Never Materialized
Not all startups failed due to problematic deals; some simply never secured the necessary follow-on funding to continue operations.
Nigerian fintech Joovlin ceased operations in January 2025 after failing to attract investment beyond its initial seed round. The company’s inability to raise additional capital hindered its efforts to expand its user base and scale effectively.
In South Africa, 54 Collective (formerly Founders Factory Africa) faced a critical setback when the Mastercard Foundation withdrew its grant in January 2025, following public criticism over a $689,000 rebranding exercise. The loss of this key funding source left the venture studio unable to find alternative financing, leading to its closure and highlighting the vulnerability of ecosystem builders reliant on single major backers.
Another notable exit was Nigerian open-finance startup Okra, which had raised over $16.5 million and was considered a cornerstone of Africa’s fintech infrastructure. However, slower-than-expected user adoption, stringent regulatory environments, and waning investor patience culminated in its exit in July 2025.
Regulatory Crackdowns and Trust Erosion: Deals That Never Got Off the Ground
Some companies were unable to even begin negotiations for new investments or acquisitions due to regulatory actions or loss of trust.
South Africa’s trading platform Banxso was hit with a hefty ZAR 2 billion (approximately $118 million) fine by the Financial Sector Conduct Authority for involvement in deepfake trading fraud. By August 2025, the company was provisionally liquidated, with no public record of rescue attempts.
In Nigeria, Bento Africa abruptly ceased operations in February 2025 amid allegations of tax evasion and pension fraud. The fallout led major partners such as Moniepoint and Paystack to sever ties, effectively ending any prospects for recovery once trust was irreparably damaged.
Unveiling Internal Conflicts: Deals That Sparked Public Disputes
Not all failed transactions resulted in shutdowns; some exposed underlying tensions within companies.
Kenya’s M-KOPA experienced a public dispute when a co-founder filed a complaint with regulators over a planned share buyback. The allegation centered on an artificially suppressed valuation intended to disadvantage local employees. What was expected to be a routine transaction escalated into a legal battle, illustrating how governance issues can derail even seemingly straightforward deals.
A Market Growing More Selective and Demanding
With approximately 614 deals completed in 2025-surpassing figures from both 2023 and 2024-Africa’s tech ecosystem is clearly on a path to recovery. Companies successfully raised capital, acquisitions proceeded, and the market remained active.
However, the numerous failed deals reveal a maturing environment that is less tolerant of risk and more discerning about where capital is deployed. Investors are increasingly prioritizing startups with transparent governance, sustainable business models, and clear growth trajectories. Acquisitions are no longer a safety net for struggling companies, and regulatory compliance has become a non-negotiable prerequisite.
The high-profile deals that fell apart in 2025 serve as a barometer for the continent’s evolving investment climate-one that has moved beyond the era of easy money and is now focused on building resilient, well-managed enterprises.
