• Venture debt surpassed equity as Africa's top startup funding source in 2025
• Six major debt deals drove $1.6B raised, led by East Africa
• Southern Africa led equity value; fintech drew most investor interest
  

Venture debt has moved from the margins to become the main alternative to traditional venture capital in Africa, overtaking equity investment for the first time in the first nine months of 2025.

Startups on the continent raised 1.6 billion dollars in debt financing between January 1 and September 30, already surpassing the 1 billion dollars secured in all of 2024, according to a report released on Thursday by the African Private Equity and Venture Capital Association. Debt financing during the period was higher than the 1.4 billion dollars invested in equity by venture capital firms, which was spread across 362 deals and held roughly steady compared with the same period last year.

The surge in debt financing was driven by six large transactions that together accounted for 1.1 billion dollars. Notable deals included 156 million dollars raised by Kenyan solar firm Sun King and 137 million dollars secured by Senegalese fintech Wave.

East Africa led the continent’s debt activity. Kenya accounted for 22 percent of all debt transactions in the first three quarters of 2025, twice the share of Egypt, Ghana, and Nigeria, which each represented about 11 percent. The median value of debt deals was 7 million dollars, slightly lower than the record 7.5 million dollars set in 2024. The median size of equity transactions reached 3 million dollars, up 20 percent from the same period in 2024. The figures point to a significant shift in the region, with debt changing from a complementary instrument to a major source of liquidity and growth for African startups.

Southern Africa led the continent in the value of traditional venture capital investment, accounting for 26 percent of total equity deal value over the nine months. The region’s lead was driven by a higher number of funding rounds above 20 million dollars.

North Africa ranked second with 23 percent of total deal value, followed by West Africa with 21 percent, East Africa with 11 percent and Central Africa with 1 percent.Companies operating across several African sub-regions captured the remaining 18 percent.

By sector, financial services attracted the largest share of equity investment at 31 percent. Information technology followed with 20 percent, while industry accounted for 13 percent. Consumer staples and utilities each represented 8 percent of equity flows.

Walid Kéfi