Since 2023, African investors have become an increasingly important source of capital for local startups, accounting for nearly 40% of total funding, up from 25%, as global investors continue to pull back from African tech, according to a January 2026 report by Briter, a technology research firm.
In 2022, African investors wrote cheques worth $1.6 billion, alongside nearly $5 billion from global investors, reports show.
Since then, global funding has fallen sharply to about $2.3 billion. While the decline could have been destabilising, local investors have stepped in to fill part of the gap. They have maintained a relatively constant level of investment, with the growing share of domestic capital signalling a more resilient and maturing local investment base.
Briter’s report defines a local investor as an entity headquartered in Africa.
Local fund managers deploying capital on the continent help channel funding l toward commercially viable products within African markets. This on-the-ground presence creates a cycle in which local context helps identify, back, and scale African technology products. Moniepoint, the latest African unicorn, relied on funding and strategic support from Nigerian venture capital firms to enter the consumer market, propelling the startup to nationwide scale.
“The key is having a healthy mix of local fund managers who understand the markets and can provide geographically relevant advice, which is hard to do from abroad,” Kola Aina, founder of Ventures Platform, a Lagos-based venture capital firm, told in 2025.
The rise of local fund managers can be traced to support from development finance institutions such as the International Finance Corporation (IFC) through its Catalyst program, as well as British International Investment, Proparco, and AfricaGrow, which backed African VCs as global investors retreated from the continent.
Alongside these efforts, local angel investors and high-net-worth individuals have also increased their direct investment into local funds and startups.
“Local high-net-worth individuals bring not only capital but also strong local networks, business experience, and a real stake in the success of the ecosystem,” Marge Ntambi, venture partner at Benue Capital, told in 2025. “When they invest, they’re investing in their communities, their economy, and their legacy.”
Overall funding raised
While African venture capital is stabilising after two volatile years, the recovery remains uneven, shaped by deep regional concentration, a thin exit pipeline, and a widening gap between early-stage capital and scalable growth.
Startups across the continent raised $3.6 billion in 2025, a 25% increase from the previous year, across 635 disclosed deals, according to Briter. Deal activity rebounded faster than capital volume, with transactions up 43%, signalling renewed investor appetite for African tech, albeit with smaller cheque sizes.
That capital, however, remains heavily concentrated. Nigeria, Kenya, Egypt, and South Africa, the “Big Four,” got between 80% and 85% of total funding, continuing a decade-long pattern of geographic concentration. These markets dominate not just because of startup density but because they have the late-stage companies capable of absorbing larger tickets.
By contrast, Francophone Africa and smaller Anglophone markets are recording steady growth in deal count but continue to raise relatively small rounds in value. Countries such as Senegal, Côte d’Ivoire, Rwanda, and Benin are generating early-stage activity and sector-specialist startups, but rounds remain below $5 million, insufficient to consistently bridge companies to regional or pan-African scale.
Shrinking growth-stage capital
Briter’s data shows that early-stage deals continue to dominate by volume, while growth-stage capital has yet to recover to pre-2022 levels. Even as total funding rebounded, late-stage rounds remained scarce, and mega-deals accounted for just 1% of transactions while capturing roughly 25% of total value, underscoring a handful of companies’ skewed headline numbers.
The result is a growing cohort of startups that can raise seed and Series A rounds but struggle to secure follow-on capital. In response, founders are increasingly turning to debt and hybrid instruments to extend their runway.
Exits, while improving, remain modest. Briter tracked over 60 known acquisitions in 2025, spanning fintech, software, logistics, mobility, and renewables. Most were corporate-led acquisitions or intra-African consolidations, rather than large venture-scale exits.
Fintech continued to dominate merger activity by count, with 27 transactions, reflecting both sector maturity and pressure to consolidate amid tighter funding conditions. However, climate, energy, and infrastructure-adjacent startups are increasingly appearing on acquisition lists, particularly those with asset-backed or recurring cash-flow models, which are more attractive to strategic buyers in volatile markets.
Notably absent are large initial public offerings (IPOs) or cross-border exits capable of recycling capital at scale. Without them, African capital remains reliant on secondary sales, partial exits, and M&A as liquidity events, limiting the speed at which capital can be redeployed into the next generation of companies.
