4 African Tech Companies That Folded in Q1 2025

Why promising startups couldn’t weather the storm

The first quarter of 2025 has been especially tough for Africa’s tech startup ecosystem. The excitement that once surrounded venture-backed innovation is giving way to more frequent announcements of shutdowns, paused operations, or hasty restructuring. 

Behind the headlines are stories of ambition, promise and hard realities.

Why the startups didn’t grow

A key contributor to the recent wave of startup closures is the sharp dip in investor funding. In the first half of 2024, African startups collectively raised just $780 million, a steep 57% drop from the same period the year before. 

This was the lowest funding total since late 2020 and sent shockwaves across the continent’s startup scene.

The slowdown isn’t just about fewer cheques being written; it’s also about changing investor sentiment. Rising global interest rates have made capital harder to come by, especially for early-stage startups in emerging markets like Africa. 

As money dries up, startups that were already walking a tightrope between growth and survival are beginning to fall.

But external conditions aren’t the only problem. Internal challenges such as shaky leadership, fragile business models, and mismanagement have also played a big role.

Here are four African startups that called it quits in Q1 2025.

Joovlin

Founded in 2020, Joovlin set out to empower micro-retailers across Africa with simple digital tools to manage sales and distribution. The Nigerian fintech created an all-in-one platform that allowed small vendors to sell via social media, manage orders, and build online storefronts with ease.

Joovlin made early progress, onboarding thousands of resellers and suppliers. But scaling proved difficult. Revenue growth lagged, and the company struggled to raise additional capital after its $100,000 pre-seed round from MEST Africa.

By January 2025, with funding dried up and no path to sustainability in sight, Joovlin quietly shut down.

Edukoya

Edukoya entered the edtech space in 2021 with big ambitions offering digital content, live tutoring, and an AI-powered platform for K-12 students. With a record-setting $3.5 million pre-seed round, the startup seemed poised to transform how African students learn.

And the numbers looked good at first, 80,000+ students onboarded, over 15 million questions answered. But good metrics don’t always make a good business. 

Edukoya couldn’t convert usage into revenue. Internet access, device availability, and low disposable income among its target market made it hard to grow sustainably.

By February 2025, Edukoya acknowledged the market wasn’t ready. Instead of burning through funds, the company chose to wind down and return capital to investors.

Bento Africa

Bento Africa launched in 2019 to simplify payroll and benefits management for African businesses. For a while, it worked. The company gained attention for helping employers handle everything from tax to pensions across multiple countries.

But beneath the surface, things were unraveling. By early 2025, Bento was mired in legal troubles. Allegations of unpaid taxes and pension contributions sparked investigations from Nigerian authorities. 

Internally, the situation was no better, CEO Ebun Okubanjo resigned, and the entire engineering team was laid off after disputes over unpaid salaries.

In February, the company paused operations to regroup and handle obligations, but the damage to its credibility and structure was already done.

Lipa Later

Kenya’s Lipa Later was once a BNPL darling, backed by over $15 million in funding. Its mission: to make everyday purchases more accessible by allowing customers to pay in installments.

However, by March 2025, Lipa Later was placed under administration. The company had taken on too much debt and failed to secure new funding. Its 2023 acquisition of Sky Garden, a struggling e-commerce platform only added to financial instability.

Now, administrators are working through creditor claims, and the future of one of East Africa’s most hyped fintechs remains uncertain.