African technology startups raised $1.44bn in the first half of 2026, broadly unchanged from a year earlier, but the number of disclosed transactions fell sharply as investors concentrated capital in fewer, larger companies.

Funding increased by 1.4% from $1.42bn in the first half of 2025, while the number of disclosed deals declined by 42% to 146 from 252, according to The State of Tech in Africa H1 2026, published by TechCabal Insights in partnership with Fido.

The report described the figures as evidence that African startup funding may have found a floor after several years of steep fluctuations, although the stable headline concealed major changes in the structure and destination of capital.

“Two consecutive halves at roughly the same level do not by themselves make a trend, but they do suggest a floor, and a floor is what founders have been asking for,” African Development Bank industrial and trade development director Ousmane Fall wrote in the report’s foreword.

Fall said investment was shifting away from pure-play payments businesses towards batteries, grids, vehicle fleets and other physical infrastructure.

“Startups are no longer defined by how much they can raise but by how durably they build,” he said.

Debt takes larger share

Equity remained the largest source of funding but declined to $818mn from $948mn in the first half of 2025.

Debt financing increased to $614mn across a record 36 transactions and accounted for 42.6% of all capital raised. Grants contributed about $9mn.

The shift reflected growing investment in asset-heavy businesses that require financing for vehicles, energy systems and other physical infrastructure. It also allowed founders to raise capital without issuing additional shares, although borrowers remain exposed to interest, refinancing and currency risks.

Electric-motorcycle and battery-swapping company Spiro drove much of the increase after raising $327mn, the largest African technology transaction recorded during the period.

Spiro’s funding alone represented almost 23% of total startup capital and helped lift logistics and transport funding to $463mn from $114mn a year earlier.

SolarAfrica completed the second-largest funding round at $94mn, while Vaal raised $64mn and biodigester and agricultural-energy company Sistema.bio secured $53mn.

Cross-border payments company Nala and Egyptian food and e-commerce platform Breadfast each raised $50mn.

Other large rounds included $45mn for Gocab, $41mn for Egyptian financial-technology group MNT-Halan and $40mn each for Taurex and CrossBoundary Energy.

Mylo and Blnk raised $37mn each, remittance platform LemFi secured $35mn, Terra raised $34mn and Nigerian mobility company Max attracted $32mn.

Zeno and pan-African transport platform Gozem each raised $25mn, while Lucky secured $23mn, South African mobility company Lula raised $21mn and Nigerian financial-technology company NowNow attracted $20mn.

Further recipients included property platform Yakeey, agriculture company Victory Farms and energy provider Starsight, which each raised $15mn. Dodai and Flexstock secured $13mn each, while Cauridor raised $12mn and Lupiya attracted $11mn.

Sawa Energy, GreenCo and Nafasi each raised $10mn.

The 30 largest recipients captured 84% of all capital raised, illustrating the extent to which funding was concentrated among a relatively small group of businesses.

Rounds of between $10mn and $99mn accounted for 66% of capital, while transactions worth less than $500,000 represented only 19% of disclosed deals.

“Early-stage deals are still happening, there is just a convergence to quality in the ecosystem with many high-quality founders and startups getting oversubscribed rounds,” Delta40 investment partner Biola Alabi said.

“Low quality startups are getting withered away across all fundraising stages. Positively, we are seeing a gradual resurgence of strong founders at the early-stage,” she added.

Climate-related investment overtakes fintech

Fintech remained the largest individual category, raising $488mn across 45 transactions.

However, fintech funding declined by 23.7% from $639mn in the first half of 2025, while the number of deals fell by 36.6%.

Climate-related businesses collectively raised $688mn across transport, energy, agriculture, waste and sustainability-related services, surpassing pure-play fintech for the first time.

Energy and water companies raised $228mn across 17 transactions, compared with $219mn through 19 deals a year earlier.

Agriculture and food funding increased to $78mn from $28mn, despite the number of transactions falling to 11 from 26.

Waste-management companies attracted $56mn through two transactions, while deep-technology companies raised $41mn across four deals.

Housing businesses received $26mn, while healthcare startups raised about $25mn across 20 transactions.

Education and employment platforms attracted only $4mn, down more than 90% from $43mn a year earlier.

Fall noted that healthcare and education together raised less than $30mn despite the continent’s growing population and demand for basic services.

“Capital has steadied without arriving where it is most needed, and it will not get there on foreign cheques alone,” he said.

African investors provide 37% of capital

TechCabal Insights tracked 231 investors that deployed capital during the first six months of the year.

International investors accounted for 63%, while African investors represented 37%.

The increase in local participation provided some protection against a pullback by international venture-capital investors, although the report said pension funds, sovereign wealth funds and other African institutions remained slow to treat innovation as an investable asset class.

Fund managers had secured approximately $1.73bn in capital that had not yet been deployed, offering a potential source of funding during the second half.

The report expects investment to remain concentrated in Nigeria, Kenya, South Africa and Egypt because of their larger talent pools, banking systems and consumer markets.

Acquisitions nearly double

The report recorded 63 mergers and acquisitions during the first half, an increase of 91% year on year.

Only 12 transactions disclosed values, but those deals were worth a combined $7.8bn.

Southern Africa accounted for 29% of acquisition activity, followed by West Africa with 21% and North Africa with 19%.

Spiro acquired engineering-design company Coexlion to localise production of lower-cost electric vehicles.

Eyewear company Magrabi Retail announced plans to acquire a 51% majority stake in Baraka Optics, while private-equity investor Phatisa signed agreements to acquire an additional 60% stake in Zaad.

Nigerian business-banking platform Brass ceased operating as an independent company and merged its operations into Paystack’s licensed microfinance-bank infrastructure.

South African payments company Yoco acquired artificial-intelligence assistant developer Dyner.ai to add automated operational insights for small businesses.

Redpoint Advisors bought VoxCroft Analytics to expand its population and location-based risk-analysis capabilities.

Bluechip Technologies acquired text-to-speech artificial-intelligence platform YarnGPT after tracking its performance during a hackathon.

The report said some buyers were acquiring capabilities that would have been expensive or time-consuming to build internally, while other transactions offered founders an exit as weaker fundraising conditions made it harder to remain independent.

Companies accelerate cross-border expansion

TechCabal Insights tracked 39 geographical expansions, up 86% from 21 in the first half of 2025.

Fintech companies accounted for 44% of the total, with LemFi, Payaza, Nala, Moniepoint, Raenest and MoneyHash among the companies entering additional markets.

Logistics and transport accounted for 18% of expansions, led by Auto24.Africa, Spiro and Yango.

Deep-technology and business-services companies represented 10% each, with Cybervergent, SecureID, Identy and TrendAI increasing their geographical reach.

Starlink, Yassir, Taager, bPOWERd and Expand Health were among companies from telecommunications, retail, energy and healthcare that entered new markets.

Around 38% of expansions took African businesses beyond the continent as founders sought hard-currency revenue and reduced dependence on volatile domestic currencies.

The report cited moves into Canada, the UK, Australia, China, Iraq and Bahrain.

Cybersecurity and compliance platform Cybervergent expanded into Kenya, Ghana and South Africa, while Smartcomply entered the UK market with products focused on financial-crime compliance along payment corridors linking Britain and Africa.

Egyptian e-commerce company Taager opened a sourcing office in China, while Kenyan payments company WapiPay obtained a Canadian licence covering fiat and virtual-currency transfers.

Within Africa, Spiro entered Cameroon with electric motorcycles and battery-swapping infrastructure, while CreditChek expanded credit-data services into Kenya, Uganda and Rwanda.

Chinese electric-vehicle manufacturer Yadea Group (HKEX:1585) launched electric two-wheelers for Kenya’s motorcycle-taxi market, while Starlink secured authorisation to operate in Côte d’Ivoire. (HKEX News)

Layoffs reach record level

The report tracked about 2,574 technology-sector job losses during the first half, the highest number in its database.

East Africa accounted for 70% of disclosed layoffs.

Jumia Technologies (NYSE:JMIA), Zap Africa and Breadfast reduced technology, product and marketing teams as they introduced software and artificial-intelligence tools into routine operations. (investor.jumia.com)

Cryptocurrency platforms Quidax and Zap Africa reduced consumer-facing teams and shifted towards business-to-business infrastructure products as trading activity weakened.

Nigeria’s banking recapitalisation also contributed to job losses. Unity Bank (NGX:UNITYBNK), Providus Bank and FirstBank, a unit of First HoldCo (NGX:FIRSTHOLDCO), cut hundreds of contract workers as mergers and restructuring removed overlapping functions. First HoldCo’s trading symbol was changed from FBNH to FIRSTHOLDCO in 2025. (DocLib)

Kenya-based data-labelling company Sama eliminated more than 1,000 jobs after losing a major contract, while Standard Chartered Bank Kenya (NSE:SCBK) automated branches and reduced operational roles. (Standard Chartered)

The report said the cuts reflected a combination of weaker financing, cost reduction, automation, mergers and pressure on companies to reach profitability.

Shutdowns spread across sectors

TechCabal Insights recorded 13 disclosed shutdowns during the period.

Nigeria accounted for 23%, while Kenya and South Africa each represented 15%.

Jumia Technologies (NYSE:JMIA) closed its local consumer marketplace in Algeria as competition from Chinese e-commerce platforms intensified. Jumia confirmed in February that it had decided to cease operations in Algeria. (investor.jumia.com)

Uber Technologies (NYSE:UBER) stopped operating in Tanzania, which the report attributed to local transport regulations that made the business difficult to sustain. (Uber Investor Relations)

Nigerian e-commerce company Alerzo shut its offshore funding structure in Singapore following a court-ordered asset freeze in its main market.

Clean-cooking company KOKO Networks closed after raising more than $100mn, following disputes involving international carbon-credit rules.

Techstars-backed payments provider Chimoney shut down after exhausting its available capital.

Brass also stopped operating independently when its activities were absorbed into Paystack Microfinance Bank.

The report said 59 technology companies had shut operations since 2022, having raised a combined $465mn before closing.

Restructuring becomes central survival strategy

The report tracked 46 restructurings or product expansions.

Nigeria accounted for 46% of the total, followed by Kenya with 13% and South Africa with 11%.

Companies increasingly moved away from pure digital-intermediation models towards businesses involving logistics, energy assets, merchant infrastructure and other physical operations.

Some reduced exposure to unprofitable consumer services, while others introduced business-to-business products, financing services or additional revenue streams.

The report highlighted Quidax and Zap Africa’s shift towards infrastructure customers as examples of cryptocurrency platforms adapting to weaker retail activity.

Brass’s integration into Paystack’s regulated banking operation was another example of restructuring driven by licensing, capital and operating pressures.

The report said investors were increasingly favouring vertically integrated companies that control physical infrastructure and larger parts of their supply chains.

Partnerships reach record level

TechCabal Insights recorded 117 partnerships between companies during the first half, the highest level in its tracking period.

The agreements covered distribution, payment integrations, infrastructure sharing, merchant financing, telecommunications, logistics and market entry.

The report said partnerships were becoming a cheaper alternative to building infrastructure from scratch, particularly for companies entering new countries.

Businesses were increasingly collaborating with banks, telecommunications operators, retailers and energy companies to secure licences, distribution networks and customer access.

This expansion in partnerships, acquisitions and geographical moves suggested that African technology companies were increasingly choosing consolidation and collaboration over isolated growth.

Regulation becomes a competitive advantage

The report said regulatory fragmentation had become one of the largest obstacles to scaling across Africa.

East African governments were increasing digital-service taxes and tariffs affecting solar equipment, while West African regulators were strengthening data-privacy audits and banking-licensing rules.

Southern African countries were introducing startup laws while requiring foreign platforms to register local entities.

The differing rules raised the cost of regional expansion because companies were required to adapt corporate structures, compliance systems, products and contracts in each market.

However, strong regulatory capabilities were also becoming a competitive advantage.

Companies able to obtain licences and comply with data, banking and consumer-protection rules were better positioned to attract institutional capital, enter partnerships and acquire weaker rivals.

The report predicted that smaller companies unable to bear those costs would increasingly merge with licensed operators or leave regulated sectors.

Outlook points to further consolidation

TechCabal Insights said African technology was undergoing a structural reset rather than a conventional downturn.

Funding is expected to remain concentrated in companies with physical assets, predictable revenue and stronger governance.

The report forecast continued acquisitions as larger businesses buy competitors for licences, market share and technical capabilities.

Cross-border expansion is also expected to accelerate as companies pursue hard-currency revenue and spread infrastructure costs across several markets.

At the same time, weak business models are likely to face further layoffs and closures because investors have become less willing to provide emergency funding.

“Ultimately, the next half year will reward companies capable of building resilient operations across borders while mastering local execution and strict corporate governance,” the report said.

“The future of African tech belongs to those who build durably.”