Nigerian Startups Shift to Debt Financing in 2025

Nigerian startups are shifting towards debt financing, which represented 41% of all capital raised by African tech startups in 2025, a significant increase from 17% in 2019, according to Partech Africa’s annual venture capital report. This trend is attributed to several factors, including businesses achieving revenue predictability that allows lenders to underwrite loans.

Babatunde Akin-Moses, founder of digital lender Sycamore, noted that this shift reflects the discipline required by institutional lenders, which was crucial for Sycamore’s commercial paper issuance. Temitope Ekundayo, co-founder of GetEquity, emphasized that the evolution of equity is more significant than debt replacing it, as new equity structures often behave like debt.

Oluwaseyi Ayodeji, an AI infrastructure program leader, acknowledged the maturity driving this continental shift but expressed caution regarding its applicability to Nigeria. In 2025, Nigeria secured $160 million in debt financing, a 132% increase year on year, but still only 19% of its total funding, compared to Kenya's $498 million and Egypt's $246 million.