A wave of startup closures is sweeping through Africa’s tech ecosystem, and Nigeria appears to be the hardest hit. Four promising African startups closed shop between January to March 2025 alone.
The shutdowns follow a stark drop in funding, compared to the investment that flowed into the ecosystem in the last five years.
African tech startups raised just $780 million in the first half of 2024, the lowest figure since 2020 and a 57% decline from the same period in 2023.
While rising global interest rates and investor caution are partly to blame, internal missteps and shaky business fundamentals also played a role.
“Understanding the reasons behind failures can lead to more resilient and adaptable business models,” notes a report by Wilbur Labs, a San Francisco-based startup studio that surveyed 150 founders on post-shutdown lessons.
Here are four African startups that called shut down operations in early 2025 – and what went wrong.
4. Lipa Later (Kenya)
Sector: Buy Now, Pay Later (BNPL)
Founded: 2018
Shutdown: March 24, 2025 (Administration)
Lipa Later was once seen as East Africa’s BNPL leader. It had raised over $15 million, including $12 million in equity funding in 2022 and $3.4 million in debt financing in 2023.
But its aggressive expansion, especially its KES 250 million (about $1.9 million) acquisition of struggling e-commerce platform Sky Garden in late 2023, strained its finances.
With no new funding in 2024 and rising debt, the company was placed under administration in March 2025 – meaning
Joy Vipinchandra Bhatt of Moore JVB Consulting LLP is leading the administration process, with creditors submitting claims and assessing potential liquidation or restructuring.
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3. Bento Africa (Nigeria)
Sector: HR/Payroll Tech
Founded: 2019
Shutdown: Temporarily paused in February 2025
What began as one of Nigeria’s most promising HR-tech platforms hit a wall in early 2025.
Bento, known for automating payroll and managing employee benefits, suspended operations after a slew of crises.
By February, tax and pension remittance scandals had sparked investigations by the Lagos State Inland Revenue Service (LIRS) and the Economic and Financial Crimes Commission (EFCC).
Meanwhile, staff unrest boiled over over unpaid salaries. CEO Ebun Okubanjo resigned, and the entire engineering team was laid off.
The board announced a temporary shutdown, citing the need to stabilise operations and resolve outstanding client obligations. Payroll delays disrupted services for several businesses.
While Bento claims efforts are underway to resume operations, its future remains uncertain.
2. Edukoya (Nigeria)
Sector: Edtech
Founded: 2021
Shutdown: February 2025
Edukoya, founded by Honey Ogundeyi, entered the market with a bold goal to transform K-12 education in Africa through digital learning.
Backed by a record-breaking $3.5 million pre-seed round in December 2021, the platform offered live tutoring, practice questions, and academic content to thousands of students.
Within two years, Edukoya had served over 80,000 students, recorded 15 million answered questions, and hosted daily live classes. Yet it couldn’t convert user engagement into revenue.
The startup cited “market readiness issues, connectivity challenges, limited device access, and low disposable income” as barriers to scale.
After failed attempts at partnerships and pivots, Edukoya returned capital to investors and shut down operations, claiming the company was ahead of its time.
1. Joovlin (Nigeria)
Sector: Fintech
Founded: 2020
Shutdown: January 2025
Joovlin set out to empower micro-suppliers and retailers across Nigeria with tools for managing online orders and boosting productivity.
Its platform allowed vendors to take orders via social media, create e-commerce websites, and manage inventory all in one place.
The company had early traction – over 2,000 active resellers and 6,000+ listed products – and secured $100,000 in pre-seed funding from MEST Africa.
But it failed to scale. Attempts to raise follow-on funding were unsuccessful, and revenue never reached sustainability.
The founders: Kingsley Nwose, Yusuf Olalere, and Lucky Mark opted to shut down rather than operate on a broken model.
Fragile foundations
These shutdowns underscore how exposed Africa’s tech ecosystem remains to both global economic shifts and internal structural weaknesses.
Beyond lack of funding, startups continue to battle unreliable infrastructure, limited capital access, and inconsistent regulation. Even well-funded ventures can falter under the weight of governance issues, flawed execution, or weak market demand.
Dash, a Ghanaian fintech once lauded as a pan-African disruptor, famously shut down in 2023 after burning through $86 million without reaching product-market fit.
Yet, there is room for optimism. More founders and investors are reflecting on what went wrong. And with each closure comes data, insights, and hopefully, more disciplined ventures.
But for now, Q1 2025 has delivered a sobering reminder that traction and capital aren’t enough, sustainable growth, execution, and timing matter more.
