new companies in the area $600 million has been raised in Q1 2026 from Egypt, Kenya, Nigeria, South Africa and elsewhere in the region, a 27 percent increase from $470 million in Q1 2025.
Figures from Africa: The Big Deal, which revealed it yesterday, noted that the funding was largely debt.
The report revealed that debt funding increased six times from $50 million in Q1 2025 to $305 million in Q1 2026, while equity funding declined by 27 percent from $400 million in Q1 2025 to $290 million in Q1 2026.
For the first time in recent quarters, debt has become a major force in Africa's start-up funding landscape.
Co-Founder of Africa: The Big Deal. Max Cuvelier Giacomelli said: “The numbers look good at first glance, but the sharp decline in equity and the disappearance of smaller deals point to a more challenging environment for early-stage start-ups.”
According to the report, deals fell 34 percent from 140 in the first quarter of 2025 to 92 in the first quarter of 2026. The smaller $100,000-$500,000 rounds were particularly hard hit, falling from 73 to 32.
Meanwhile, deals over $10 million increased from 14 to 18 and now represent 82 percent of total funding, up from 63 percent. This concentration more than doubled the average deal size, from $0.5 million to $1.3 million.
The report also showed that withdrawals doubled from six to 12, providing much-needed liquidity.
Climate tech funding also grew by a strong 48 percent to $184 million, with its share rising from 26 percent to 31 percent despite a decline in energy deals. Fintech retained its position as the top sector.
Women founders and CEOs continue to face significant challenges. Funding for start-ups with at least one female founder or CEO fell 56 percent from $111 million in the first quarter of 2025 to $49 million in the first quarter of 2026, with the number of such deals falling from 46 to 20.
Their share in total funding dropped from 24 percent to only eight percent. “Limited access to early-stage funding is hindering the pool of investable female founders,” said Daisy Leach, director of portfolio and strategy at TLCom Capital.
Geographically, big four markets (Nigeria, Kenya, South Africa and Egypt) still dominate activity, although their relative share has seen a slight decline.
Data from the first quarter of 2026 underscores a maturing African start-up ecosystem, where more established companies are turning to debt to fuel growth without huge downgrades, while early-stage and smaller enterprises, particularly women-led enterprises, are struggling for equity capital.