African Tech Funding Rises to $4.1B in 2025 as Debt Takes Larger Role

BREAKING NEWSJanuary 23, 2026 at 10:12 PM UTC

TLDR

African tech startups raised record US$4.1 billion in 2025, with equity funding at US$2.4 billion and debt financing reaching US$1.6 billion.
Kenya led the funding drive with US$1.04 billion, while South Africa topped in equity funding and deal count.
The funding landscape shows a shift towards debt financing and larger investments, signaling a maturing ecosystem favoring scale-focused funding.

African tech startups raised US$4.1 billion in 2025, up 25% from a year earlier, marking the strongest funding year since 2022, according to Partech’s annual Africa Tech Venture Capital Report released January 22, 2026.

Equity funding reached US$2.4 billion, an 8% increase year on year, across 462 deals. Debt financing climbed to a record US$1.6 billion, up 63%, confirming debt as a larger part of startup financing on the continent. Total deal activity rose to 570 transactions, up 7%, signaling a rebound after two years of slowdown.

Kenya led Africa in total capital raised with US$1.04 billion, driven by large debt rounds and four of the nine megadeals recorded in 2025. South Africa ranked first in equity funding and deal count, reclaiming a position it last held in 2017. Nigeria and Egypt remained among the top four markets, which together accounted for 72% of total capital.

Fintech remained the largest equity sector, though investment spread more evenly across cleantech, healthtech, and enterprise software. Female-founded startups increased deal activity but continued to attract a smaller share of total funding.

Key Takeaways

The 2025 rebound points to a shift in how African startups finance growth. Debt accounted for 41% of total capital deployed, compared with 31% in 2024 and 17% in 2019. This reflects a growing preference for non-dilutive funding among later-stage startups with predictable revenues. Equity markets showed signs of stabilization rather than rapid expansion. Average deal sizes increased at Series A and Series B, suggesting investors are backing fewer companies but with larger checks. This marks a move away from seed-heavy activity toward scale-focused funding. Geographically, funding remains concentrated. Kenya’s rise was driven by debt and large transactions, while South Africa’s performance came from steady deal flow rather than outsized rounds. Outside the top four markets, only a few countries crossed US$50 million in equity funding. Sector diversification also stands out. While fintech remains central, strong growth in cleantech and healthtech suggests investor interest is broadening. The data points to a maturing ecosystem that relies less on equity alone and more on a mix of capital suited to different growth stages.

Venture Capital