African Tech Sets New M&A Record as Market Matures

In the fast-evolving African tech landscape, mergers and acquisitions (M&A) have emerged as vital strategies for established startups looking to expand their market reach, build talent pools, or access innovative technologies. A recent report by the digital economy consultancy firm TechCabal Insights published on Thursday, July 24, 2025, revealed that the first half of 2025 witnessed a record-breaking 29 M&A deals across the African tech sector. This surge in M&A activity represented a substantial 45% increase compared to the same period in 2024 and a notable 53% growth from 2023, indicating a maturing market environment where well-established startups were strategically acquiring competitors.

The report, titled “The State of Tech in Africa H1 2025: Building momentum through strategic partnerships,” delved into the details of these M&A transactions and highlighted a shift towards consolidation in the market. While financially robust startups were acquiring competitors to strengthen their positions, early-stage startups facing funding challenges sought mergers or acquisitions with better-capitalized firms. Among the sectors leading in M&A deals were financial technology (fintech) with 13 transactions, followed by e-commerce, mobility, telecommunications, health technology (healthtech), deeptech, and climate tech.

Regionally, North Africa emerged as the frontrunner in M&A activity, recording 8 deals, closely trailed by East Africa with 7 transactions, West Africa with 6, and Southern Africa with 4. Interestingly, four deals involved startups based outside Africa. Significant acquisitions included Nigerian fintech LemFi’s takeover of Irish fintech Buttercrane and the acquisition of Egyptian startup Fatura by B2B e-commerce player MaxAB-Wasoko, which operates in Egypt and Kenya.

Diving deeper into the trends shaping the African tech ecosystem, the report underscored the growing trend of international expansion as a key driver for growth. In the first half of 2025, 20 geographic expansion operations were recorded, with nine African startups venturing beyond the continent. Nigerian and Egyptian startups led the charge, expanding their footprints across multiple African countries and beyond, leveraging their strong local foundations to drive global competitiveness.

Furthermore, the report shed light on funding trends and layoffs within the African tech space. While layoffs decreased by 55.7% in the first half of 2025, indicating market stability after a funding downturn, African startups managed to raise $1.42 billion during the same period, marking a significant 78% increase from 2024. Notably, Nigeria, Kenya, Egypt, and South Africa accounted for over 76% of total funding raised, signaling a positive outlook for the venture capital landscape in Africa.

Looking ahead, TechCabal Insights predicts a surge in M&A activity and an uptick in funding, reflecting a reinvigorated venture capital market poised for growth and innovation in the African tech sector.