Africa’s startup ecosystem raises $843m in five months

Africa’s startup sector raised $843 million through 160 deals valued at $100,000 or more between January and May 2026, according to Africa: The Big Deal’s latest report. While deal activity increased in May—37 startups secured $135 million compared to 32 deals worth $110 million in April—the total funding fell short of the 12-month average of $255 million and the $300 million monthly average seen in 2025. Four transactions accounted for nearly 75% of May’s funding: Nala’s $50 million credit facility, LemFi’s $30 million Series B extension, Africa GreenCo’s $10 million raise, and Bfree’s $10 million round. This concentration highlights a funding gap, with established startups attracting most capital while early-stage ventures struggle. Debt financing now plays a larger role, with $68 million raised through debt in May compared to $65 million in equity and $2 million in grants. This marks a shift from 12–18 months ago, when equity dominated over 70% of funding. The $843 million raised year-to-date is nearly evenly split between debt and equity, reflecting investor caution and a reliance on alternative financing. West and East Africa led fundraising in May, capturing 85% of the total capital, with Nigeria alone responsible for 64% of equity funding. Fintech remained the top sector, driven by Nala and LemFi’s large rounds, as investors prioritize scalable solutions addressing financial inclusion challenges. The report suggests debt financing is stabilizing the ecosystem amid declining equity investments. However, the slower pace of funding raises concerns about long-term growth, particularly for smaller startups facing tighter access to capital.