Nigerian Fintech LemFi Drives May Funding Surge for African Startups
May proved to be a mixed month for African startups, with total funding reaching $135 million—a 23% increase from April’s $110 million but significantly down from the $254 million raised in May last year.
Despite this overall decline of 47%, one company stood out: Nigerian fintech LemFi secured $30 million in Series B extension funding, representing 22.2% of the total monthly raise.
Key Highlights:
- LemFi’s Significant Contribution: The $30 million round added to the $53 million raised in January 2025, with participation from investors like Highland Europe, Left Lane Capital, and Y Combinator.
- Nala Leads Debt Financing: Tanzanian fintech Nala secured a $50 million debt facility from Liquidity through Mars Growth Capital—with an option to scale up to at least $50 million more. This will support global expansion and product development for their neobank.
- BFREE Acquires Loan Portfolios: Nigeria’s BFREE closed a $10 million equity round led by AfricInvest to expand its acquisition of non-performing retail loans—marking Algebra Ventures’ first Nigeria investment.
- Africa GreenCo Secures Funding: South Africa’s Africa GreenCo also raised $10 million to support renewable energy projects across the continent.
Implications for African Tech
The funding trends suggest a continuing shift in investor focus. While climate tech and fintech remain attractive sectors, overall investment activity is down compared to previous years—a trend that could impact startup growth and expansion plans across Africa.