Merger and acquisition (M&A) activity within Africa’s startup ecosystem reached an all-time high in 2025, with 67 transactions completed, marking a 72% increase from the 39 deals recorded in 2024.
The data comes from the State of Tech in Africa (SOTIA) 2025 report by TechCabal, which points to accelerating consolidation as African tech companies mature and pursue scale through acquisitions.
Capital Tightens as Consolidation Becomes a Growth Strategy
According to the report, African startups raised $3.4 billion in 2025, bringing cumulative funding over the last seven years to $20.16 billion. With venture capital becoming more selective, well-capitalised companies are increasingly using M&A to expand operations, obtain regulatory licences, and strengthen competitive positions.
“The surge reflects a clear transition from a fragmented landscape to one shaped by strategic consolidation and the rise of more integrated platform businesses,” the report noted.
Strategic Deals Outweigh Distress-Driven Exits
Lexi Novitske, Partner at Norrsken22, said most acquisitions in 2025 were driven by long-term strategy rather than necessity.
Although some startups exited due to challenges in fundraising, scaling, or licensing, Novitske said the majority of deals were deliberate moves aimed at expansion and capability building.
“We’re seeing increased acquisition activity from traditional institutions, including banks, alongside broader consolidation across the ecosystem,” she said.
“In many cases, the goal has been geographic expansion, while others have focused on acquiring technology to enhance product offerings.”
Fintech Dominates Deal Volume
Fintech emerged as the most active sector, accounting for 31 transactions, or nearly half of all M&A deals in 2025.
Companies such as Moniepoint, Stitch, and Rank completed multiple acquisitions to bolster banking licences, strengthen infrastructure, and broaden service portfolios.
E-commerce and Logistics See Increased Activity
Outside fintech, e-commerce recorded eight deals, while logistics and transport accounted for six, highlighting consolidation across supply chains and delivery networks.
Key transactions included:
- Twiga Foods is acquiring distributors Raisons, Sojpar, and Jumra to deepen supply-chain control
- Chowdeck’s acquisition of Mira
- Global Shop Group’s purchase of Anka to improve delivery reach
Cross-border expansion also gained momentum, with Logidoo acquiring Kamtar, signalling ambitions for regional leadership.
Telecom, Healthtech, and Deeptech Show Growing Maturity
The telecom, media, and entertainment sector recorded six deals, including AXIAN Telecom’s acquisition of Wananchi Group and a strategic investment in Jumia.
Healthcare matched that total with six acquisitions, while deeptech recorded four deals, reflecting increased confidence in complex, technology-driven businesses. Notable transactions included HearX acquiring Eargo and Adapt IT purchasing ResRequest.
Meanwhile, climate tech saw three deals, while edtech, proptech, and services each recorded one transaction, showing that consolidation is spreading into newer and more specialised segments.
Tier-One Markets Lead M&A Activity
The report shows that Tier 1 ecosystems accounted for 75% of acquired startups in 2025, underlining their importance as Africa’s primary centres for liquidity and exits.
- South Africa led with 16 acquisitions, including exits such as Bank Zero, TaxTim, and Namola
- Kenya followed with 14 deals, including transactions involving Mobius Motors
- Egypt recorded 11 acquisitions
- Nigeria posted nine deals, including Fatura and Pensions Alliance Limited
African Tech Assets Expand Internationally
African startups were also acquired across global markets, with deals recorded in the United Kingdom and United States (two each), as well as the UAE, Senegal, Netherlands, Morocco, Mauritania, Ireland, Brazil, and Uganda.
This growing geographic footprint highlights deeper cross-border integration and rising international interest in African technology assets.
What to Expect in 2026
Looking ahead, Novitske expects M&A activity to remain strong in Africa’s leading tech hubs, particularly in fintech and microfinance, where competition remains intense, and customer data and user bases are key assets.
She added that AI-driven startups, even those not yet profitable, are likely to attract acquirers as complementary tools that improve efficiency and reduce operating costs.
However, she cautioned that global economic uncertainty could limit the participation of international buyers in 2026, as many focus on risk management rather than aggressive expansion in emerging markets.
