Venture debt has transitioned from being a niche financing option to becoming the primary alternative to traditional venture capital in Africa, marking a significant milestone in 2025. For the first time, it has outpaced equity investment in the continent’s startup ecosystem within the first nine months of the year.
Between January 1 and September 30, startups raised an impressive 1.6 billion dollars in debt financing, surpassing the 1 billion dollars secured throughout all of 2024, according to a report released on Thursday by the African Private Equity and Venture Capital Association. This surge in debt financing outpaced the 1.4 billion dollars raised through equity investments in 362 deals, which remained relatively stable compared to the same period last year.
The surge in debt financing was largely fueled by six major transactions, which together accounted for a substantial 1.1 billion dollars. Among the standout deals were a 156 million-dollar raise by Kenyan solar firm Sun King and a 137 million-dollar raise by Senegalese fintech Wave, both of which significantly contributed to the growth of the sector.
East Africa emerged as the leader in debt activity, with Kenya alone accounting for 22 percent of all debt transactions in the first three quarters of 2025—twice the combined share of Egypt, Ghana, and Nigeria, which each represented around 11 percent. Interestingly, the median value of debt deals was 7 million dollars, just shy of the record 7.5 million dollars set in 2024. Meanwhile, equity deal values saw a slight increase, with the median size of these deals rising to 3 million dollars—a 20 percent increase from the same period in 2024. This shift signals a transformation in the African startup ecosystem, with debt financing moving from being a complementary tool to a primary source of liquidity and growth.
In terms of traditional venture capital, Southern Africa led the continent, accounting for 26 percent of the total equity deal value in the nine-month period. This was largely driven by a higher volume of funding rounds exceeding 20 million dollars. North Africa followed closely with 23 percent of the total equity deal value, while West Africa accounted for 21 percent, East Africa for 11 percent, and Central Africa for a modest 1 percent. The remaining 18 percent of equity deals were captured by companies operating across multiple African sub-regions.
Sector-wise, financial services attracted the largest share of equity investment, accounting for 31 percent of the total, followed by information technology at 20 percent. Industry drew 13 percent, while consumer staples and utilities each received 8 percent of equity flows, underlining the diversity of sectors driving Africa’s investment landscape.
