Africa Doesn't Need the World's Charity. It Needs Its Capital.

In 2025, African start-ups raised $3.9 billion in venture capital funding, according to the Africa Venture Capital Association. Set against global venture capital funding that topped $500 billion, the African figure represents less than 1% of worldwide funding. For a continent that will account for a fifth of the world's population, and that houses one the fastest growing regions globally, the number is difficult to reconcile.

But the $3.9 billion figure requires some unpacking.

What must first be understood is that venture capital funding comes in two forms, debt funding, or equity funding. Debt funding is a loan made to a company, whilst equity funding means the buying of a stake in a company.

Globally the ratio between debt funding and equity funding sits at around 20/80. In Africa however, the ratio is closer to 50/50.

Overall, venture capital funding into Africa increased slightly in 2025, but this was due to increased debt funding acting as a counterweight to equity funding that fell by 21%.

Around 40% of Africa’s combined equity and debt funding, or around $1.5 billion, went to climate-related projects, with green energy deals making up a significant portion of the debt pile especially.

Large backers of these debt-based climate deals were not prime entities, but rather Western Development Finance Institutions, or DFIs: government-backed financial bodies created to invest in developing economies.

Here are a few examples.

D.light, a company that builds solar energy products like lanterns, raised $300 million with backing from the US International Development Finance Corporation and Norfund, Norway's state development finance institution. Sun King, also a solar company, raised $156 million supported by British International Investment, the Dutch development bank and Norfund again. Burn Manufacturing, a clean cooking provider, raised $90 million with a portion of funding obtained by the European Investment Fund electrification initiative.

These investments are, fundamentally, climate aid: funding and grants deployed against mandatory climate mandates, not commercial conviction.

True venture capital, as practised in advanced economies, backs high-risk, scalable businesses with the potential to disrupt markets and grow into global competitors.

Africa does demonstrate some examples of this kind of investment, especially in the fintech industry.

Over the past decade, fintech start-ups on the continent have brought banking, digital payments, and private credit to millions of people previously excluded from the formal economy. The sector is technology-driven, scalable, and capable of generating the kind of returns that attract real private capital on its own terms, building businesses that Africa owns and operates.

In 2025, 39% of venture capital investment in Africa went into its fintech industry.

Africa is however, nowhere when it comes to the hottest global drawcard for venture capital investing. Around the world an unprecedented volume of money is being deployed into artificial intelligence (AI). That technology absorbed roughly half of all global venture capital in 2025, with single rounds surpassing $40 billion. Africa is almost entirely absent from that wave.

Data on venture capital investment in Africa therefore needs to be approached with nuance and some scepticism. When read against firstly its population, and then its share of global GDP, the continent is the global venture laggard and when further read against the burgeoning AI industry it barely features at all.