In 2021, Africa’s startup funding market witnessed an extraordinary boom as funding surged by 309 percent from $1.09 billion in the previous year to $4.45 billion. The momentum continued into the following year as the continent’s startup ecosystem raised $4.65 billion in 2022.
However, 2023 became the year that the tide began to turn as funding dropped by 37 percent to $2.92 billion. The following year was even tougher, sliding 23 percent further to $2.24 billion.
Hope appears to be returning, with funding rebounding to $3.42 billion in 2025 and reaching $1.44 billion in the first half of 2026. While many investors grew cautious or exited entirely following the 2021–2022 boom, others remained resilient throughout the market downturn.
An analysis, conducted by Nairametrics, of startup investment activity between 2019 and 2026 shows that 2,589 investors participated in 9,298 deals across Africa. The 10 most active investors accounted for 1,226 of those deals, or 13.19 percent of all deals recorded.
The group includes venture capital firms, accelerators, development finance institutions and startup support organizations, showing that African founders have continued to rely on different forms of capital and support even as traditional venture funding slowed.
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Launch Africa and DEG kept investing while others pulled back
Mauritius-based Launch Africa was the most active investor in the analysis, with 198 deals between 2019 and 2026.
The firm was particularly active during the funding boom, recording 67 deals in 2021 and 58 in 2022. Its activity later slowed to 12 deals in 2025, but it had already completed 21 investments in the first half of 2026.
Germany’s DEG followed with 162 deals. Unlike many investors whose activity was concentrated during the 2021–2022 funding boom, DEG continued investing as market conditions worsened.
The development finance institution recorded 50 deals in 2025 and another 25 in the first half of 2026, making it the most active investor in the ranking so far this year.
The rest of the top 10 includes Techstars with 152 deals, Google for Startups Black Founders Fund with 142, Y Combinator with 133, Flat6Labs with 100, LoftyInc Capital Management with 96, 54 Collective with 87, 500 Global with 79, and Future Africa with 77.
Their investment patterns, however, are not identical.
Techstars, for example, went from two African deals in 2019 to 58 in 2023 before falling to 20 in 2024, three in 2025, and none in the first half of 2026.
Google for Startups Black Founders Fund also recorded its strongest activity during the funding boom, with 53 deals in 2021 and 59 in 2022, but no deals so far in 2026.
This makes the continued activity of investors such as Launch Africa and DEG more significant. They have remained active at a time when some of the other major names in the ecosystem have sharply reduced their deal activity.
African investors now account for 1 in 3 startup deals
The report also points to a less obvious change in Africa’s funding market: local investors are becoming a much bigger part of the ecosystem.
African-based investors accounted for 699 investors and 3,217 deals, representing 34.59% of all deals in the analysis.
Nigeria stands out in the ranking. It is the only African country with two investors among the top 10: LoftyInc Capital Management and Future Africa.
LoftyInc recorded 96 deals during the period, with its busiest years being 2021 and 2022. Future Africa recorded 77 deals, including 27 in 2021 and 38 in 2022.
The growing role of African investors matters because local funds can be closer to the founders, markets and problems they are investing in. They can also continue supporting businesses that may not fit the investment preferences of larger international funds.
International capital remains important, however. Four investors in the top 10 are based in the United States, while European development institutions collectively accounted for 2,060 deals across 525 investors.
The funding ecosystem is therefore becoming less dependent on one type of investor. Venture capital firms, accelerators, development institutions, and African funds are all filling different parts of the funding gap.
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Why African startups are relying on more than venture capital
The shift becomes clearer when viewed against what happened after Africa’s startup funding boom.
Between 2020 and 2022, startups across the continent attracted growing amounts of venture capital as investors chased opportunities in areas such as fintech, healthtech, logistics, e-commerce, and digital infrastructure.
That environment changed when global interest rates increased, and liquidity became tighter. Investors became more careful about valuations and started paying closer attention to whether startups could grow sustainably and eventually become profitable.
For founders, this meant that raising money became more difficult even when the underlying business opportunity had not disappeared.
The investment data suggests that venture capital is only one part of the funding system African startups now have to navigate.
Accelerators such as Techstars, Y Combinator, 500 Global and 54 Collective can give early-stage founders funding alongside mentorship, technical support and access to investor networks. Google for Startups has also provided equity-free grants and other support rather than relying solely on conventional equity investment.
Development finance institutions such as DEG play another role. Their longer-term approach can allow them to continue backing businesses and markets when commercial investors become more cautious.
That helps explain why the most active investors are such a mixed group. The market is not simply replacing one VC with another. Different types of investors are filling different funding needs.
For African founders, that means the funding question is no longer just about finding a venture capital firm willing to invest. It is also about finding the right source of capital for the stage of the business, whether that means an accelerator, grant programme, local VC, international fund or development finance institution.
The slowdown has therefore not emptied Africa’s startup funding market. It has made the market more selective and more diverse, with the investors that continue to deploy capital becoming increasingly important to the next phase of African tech.