Nigerian fintechs’ $230 million funding in 2025 raises crucial questions

The fintech founder had practised the pitch fifty times. Three minutes to explain why her lending platform was different. Why would it work where others failed? Why investors should care.

She delivered it perfectly at the demo day in November. The applause was polite. The questions were pointed. “How is this different from the forty other lending fintech companies?” She stumbled. Because it wasn’t, not really. Just another app promising financial inclusion without proving it could deliver.

She was competing with 499 other Nigerian fintech companies for attention from investors who had grown tired of similar promises. Only 27 would break through.

Nigerian fintech raised $230 million in 2025. On paper, that’s a 44% drop from the $410 million raised in 2024. But the real story isn’t about the money that disappeared. It’s about the question that emerged in its place.

“Smart capital is now asking whether fintechs are solving real problems that expand the economy or simply extracting rent from existing fragility,” says Kristin H. Wilson, Managing Partner at Innovate Africa Fund. It’s a brutal assessment, but one that explains why only 27 out of over 500 Nigerian fintech companies managed to raise funding of $100,000 or more this year.

The math is stark. In a country where more than 40% of tech startups are now fintech entities, only 5% could convince investors that their vision was worth backing.

Something fundamental shifted in 2025, and it wasn’t just the numbers.

When the music stopped

The party really ended when the mega deals dried up. In 2024, players like Moniepoint and Moove raised massive rounds that artificially inflated the sector’s total funding. Those outsized cheques masked an uncomfortable truth.

Very little capital was actually reaching new or experimental models that might genuinely expand economic opportunity for everyday Nigerians.

Read also: PayPal accepts defeat: now the fintech giant finally wants to play in Africa

By 2025, reality surfaced. Moniepoint raised another $90 million in October, nearly 40% of the entire year’s fintech funding. LemFi secured $53 million in January. Kredete closed $22 million. Raenest got $11 million.

Then came the smaller rounds like Carrot Credit’s $4.2 million, PaidHR’s $1.8 million, and Accrue’s $1.58 million. These deals represented the survivors. Everyone else got nothing.

Austin Okpagu, Nigeria Country Director at Verto, sees this as a correction rather than a collapse.

Austin Okpagu, Country Manager at Verto

“I believe the 2025 funding dip is much more about market correction rather than a definitive decline for Nigerian fintech,” he explains. “While 2024’s funding was heavily concentrated in mega deals like Moniepoint’s $110 million Series C, the current environment is forcing over 430 active fintech companies to pivot from burning cash, which used to be the norm, to generating revenue, back to basics, which is the core focus for investors nowadays.”

Read also: These 5 Nigerian fintechs achieved significant milestones in 2025

The shift from vanity metrics to profitability wasn’t optional. It was survival.

Multiple forces squeezed the sector simultaneously. The Central Bank of Nigeria imposed onboarding bans, stricter KYC enforcement, and heavy monetary penalties. Inflation hit 34.8% by December 2024.

Foreign exchange volatility made returns nearly impossible to model in naira, and capital harder to repatriate. Generalist venture capitalists either paused or significantly narrowed their exposure to Nigerian risk.

“We saw stricter CBN and FCCPC regulations serving as a filter, favouring institutional-grade startups over the high volume of smaller, non-compliant entrants,” Okpagu notes. “This appears to be the hallmark of 2025. Fewer African companies were accepted into Y Combinator when compared to previous years.”

The regulatory squeeze worked exactly as designed. It separated companies with real infrastructure from those running on borrowed time and borrowed capital. But it also raised an existential question about what Nigerian fintech had actually built.

The question nobody wanted to ask

Wilson goes further than most are willing to.

She’s pointing at something uncomfortable. Nigeria now hosts more than 500 fintech companies, yet most are building variations of the same products. Digital wallets. Payment apps. Lending platforms that target the same thin slice of bankable consumers.

Meanwhile, productive credit for manufacturers remains scarce. Cash flow solutions for agricultural value chains are underfunded. Infrastructure that genuinely reduces the cost of doing business often goes unnoticed.

“The critical question has shifted from ‘Can we digitise existing behaviour?’ to ‘Are we creating new economic capacity?'” Wilson argues. “There were more apps, but not demonstrably more genuine financial resilience for households, productive capacity for SMEs, or expansion of economic opportunity.”

It’s harsh, but the funding numbers suggest investors agree.

Read also: New game: How CBN’s policies reshaped the Nigerian fintech landscape in 2025

Nikolai Barnwell, founder and CEO of pawaPay, has seen this movie before. “We’ve seen several bubbles and busts over the years since the birth of the mobile internet in Africa in the early 2010s. People get excited about Africa, but their attention span is short. So when there’s no immediate gratification for investors, they disappear again.”

Nikolai Barnwell, founder and CEO of pawaPay

He’s describing a pattern that repeats every few years. A new batch of funds discovers Africa, sells the dream, raises money on the promise of the continent, and starts spraying capital everywhere. Then reality sets in. Returns take longer than expected. The next cohort of investors arrives with fresh enthusiasm and short memories.

“The key is that the future potential of the continent is immense, but we’re still in the very early days,” Barnwell says. “We often compare it to the internet in the US in the mid-1990s. Most of all, the upside is still far in the future, and it requires patience and stamina to hang on long enough to reap the benefits.”

This tells us that African fintech is still being written, not finished.

What comes next

Tomi Davies, CiC at TVCLabs, refuses to see 2025 as a failure.

He believes 2026 will bring what he calls “recomposition” rather than simple consolidation. “Yes, M&A will increase, particularly mid-market acquisitions that won’t make global headlines but will matter locally. At the same time, we’ll see more layered capital stacks. Local angels, diaspora syndicates, DFIs, venture debt, and revenue-based instruments working together.”

Tomi Davies, CiC at TVCLabs

The ecosystem that emerges, Davies argues, won’t depend on single large cheques from foreign VCs. It will blend multiple funding sources and require startups to prove value at every stage. “The ecosystems that thrive will be the ones that learn how to finance growth with multiple tools, not just one cheque size.”

Okpagu agrees the market is evolving, not dying. “The fintech sector is currently being sustained by M&A-led consolidation, as seen with Paystack’s acquisition of Brass, which allows the ecosystem to recycle talent and assets into more efficient models.“

Read also: Nigeria’s fintech regulation: Why the Senate is rewriting rules just 5 years after BOFIA 2020

The real test for Nigeria’s fintech

Nigerian fintech’s $230 million story in 2025 isn’t really about the funding gap. It’s about an industry being forced to answer harder questions about genuine value creation. The 27 companies that raised money this year presumably have answers. The other 473 are still searching.

Wilson’s question hangs in the air. Are Nigerian fintech entities expanding economic opportunity or extracting rent from existing fragility? The companies that figure out the right answer won’t just survive 2026. They’ll define what African fintech becomes for the next decade.

The future potential remains immense, as Barnwell insists. But patience and stamina aren’t enough anymore. Investors want proof that digital wallets can become economic engines. That’s the real test Nigerian fintech faces now. Not whether it can raise money, but whether it deserves to.

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