Only 27 Nigerian Fintechs Secured Funding in 2025—But the Real Story Runs Much Deeper

The numbers look grim on the surface. Nigerian fintech companies pulled in just $230 million in 2025, marking a sharp 44% decline from 2024’s $410 million. But this headline masks something far more consequential: a fundamental reckoning with what the sector is actually building.

With more than 500 fintech entities operating across Nigeria, merely 27 managed to raise $100,000 or more. That’s a 5% success rate. In a year when fintech represents over 40% of all tech startups in the country, the gatekeeping became ruthless.

“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 question that cuts to the heart of why the money evaporated.

The Mega-Deal Era Ended

2024 painted a misleading picture. Outsized funding rounds—like Moniepoint’s $110 million Series C—artificially inflated sector totals. These blockbuster cheques obscured a troubling reality: capital wasn’t flowing to experimental models or new approaches. It was concentrating among a handful of incumbents.

By 2025, the illusion dissolved. In October, Moniepoint secured another $90 million, representing nearly 40% of the entire year’s fintech funding. LemFi landed $53 million in January. Kredete closed $22 million. Raenest pulled in $11 to naira-equivalent scale relative to other rounds at $11 million. Smaller players like Carrot Credit ($4.2 million), PaidHR ($1.8 million), and Accrue ($1.58 million) captured what remained.

For everyone else across the 400+ remaining active firms? Nothing.

Market Correction or Sector Crisis?

Austin Okpagu, Country Manager at Verto, reframes this as inevitable adjustment rather than collapse. “The 2025 funding dip reflects market correction rather than definitive decline,” he explains. “Over 430 fintech companies are being forced to shift from cash-burning operations to revenue generation. That’s the baseline investors now demand.”

The squeeze came from multiple directions simultaneously. The Central Bank of Nigeria tightened onboarding restrictions, amplified KYC enforcement, and imposed substantial penalties. Inflation reached 34.8% by December 2024. Foreign exchange turbulence made naira-denominated returns nearly impossible to forecast, complicating capital repatriation. Generalist venture firms either paused or severely limited Nigerian exposure.

“Stricter CBN and FCCPC regulations acted as a filter, separating institutional-grade startups from smaller, non-compliant operators,” Okpagu notes. “This distinction defines 2025. Fewer African companies gained Y Combinator acceptance compared to previous cohorts.”

The result was ruthless. Real infrastructure distinguished survivors from those running on borrowed time and borrowed capital.

Building Apps or Building Economy?

Here’s where Wilson’s critique becomes uncomfortable: Nigeria hosts 500+ fintech companies, yet most replicate the same offerings. Digital wallets. Payment apps. Lending platforms competing for the same thin slice of bankable consumers. Meanwhile, productive credit for manufacturers remains scarce. Agricultural value chains lack funding for cash flow solutions. Tools that genuinely reduce business costs operate invisibly.

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

The funding collapse suggests investors concur with this assessment.

Nikolai Barnwell, founder and CEO of pawaPay, has witnessed this pattern repeatedly. “We’ve seen several bubbles and busts since mobile internet emerged in Africa in the early 2010s. Investors get excited about the continent, but their attention span is short. When immediate returns disappoint, they vanish.”

He describes a predictable cycle: new funds discover Africa, pitch the dream, raise capital on continental promise, deploy everywhere. Reality arrives. Returns lag expectations. Fresh investor cohorts materialize with enthusiasm and amnesia.

“Africa’s future potential is genuinely immense, but we’re still very early,” Barnwell counters. “Compare it to the US internet in the mid-1990s. The upside exists in the future. It requires patience and stamina to survive until benefits materialize.”

African fintech, in other words, is still unwritten.

What 2026 Might Look Like

Tomi Davies, CiC at TVCLabs, resists framing 2025 as failure. Instead, he anticipates “recomposition”—not simple consolidation. “M&A will accelerate, particularly mid-market acquisitions that won’t dominate global headlines but will reshape local dynamics. Simultaneously, we’ll witness layered capital stacks: local angels, diaspora syndicates, development finance institutions, venture debt, and revenue-based instruments functioning in concert.”

The emerging ecosystem won’t depend on singular large cheques from overseas VCs. It will blend multiple funding sources and require founders to validate traction at every stage.

“Thriving ecosystems learn to finance growth with diverse tools, not relying on one funding vehicle,” Davies emphasizes.

Okpagu sees evolution rather than extinction. “M&A-driven consolidation sustains the fintech sector. Paystack’s acquisition of Brass exemplifies how the ecosystem recycles talent and capital into more streamlined models.”

The Question That Matters Now

Nigerian fintech’s $230 million in 2025 transcends funding gaps. It represents an industry compelled to confront harder questions about genuine value creation. The 27 companies that raised money presumably possess answers. The other 473 are still searching.

Wilson’s question reverberates: Are Nigerian fintech entities expanding economic opportunity or extracting value from existing fragility?

Companies that answer correctly won’t merely survive 2026. They’ll shape African fintech’s trajectory for the next decade. The continent’s potential remains substantial. Yet patience and persistence no longer suffice. Investors now demand proof that digital wallets can transform into economic engines.

That’s the genuine test Nigerian fintech confronts now—not whether it can raise capital, but whether it merits capital’s arrival.