Egypt, Nigeria lead as African startups raise $174 million

African startups kicked off the year with $174 million in disclosed funding (for deals of $100,000 and above), led by standout rounds in Egypt and Nigeria. While the total surpasses January 2023 ($106 million) and January 2024 ($85 million), it is notably below January 2025’s $276 million and the roughly $263 million monthly average of the past year—signalling a cooler start to 2026.

Deal volume slumps to multi-year low

Only 26 startups announced rounds of at least $100,000 in January—about half the monthly average over the last 12 months and well below January 2025’s tally. By this measure, January 2026 marked the weakest month since at least 2020. The numbers point to increasingly selective capital deployment, with investors concentrating on fewer, larger, and often later-stage opportunities.

Big tickets prop up totals

A handful of sizeable transactions accounted for much of the month’s funding:

• valU (Egypt): $64 million in debt financing from the National Bank.
• MAX (Nigeria): $24 million via a mix of equity and asset-backed debt.
• NowPay (Egypt): $20 million equity round.
• Yakeey (Morocco): $15 million Series A in proptech.
• Terra Industries: $12 million in the defence sector.
• Cauridor (Côte d’Ivoire): Featured among the $10 million-plus equity rounds.

Together, these deals underscore steady investor interest in asset-heavy or revenue-anchored models, even as broader risk appetite remains subdued.

Exits signal ongoing consolidation

• Flutterwave acquired Nigerian open banking startup Mono in an all-stock deal valued at around $30 million.
• Tech talent platform Savannah was acquired by Commit.
• Izili Group completed the acquisition of off-grid solar company Qotto.

These announcements point to rising M&A activity as well-capitalized players consolidate capabilities and market share in a capital-constrained environment.

What the numbers say about investor priorities

The combination of lower deal counts and a few large rounds indicates a market that rewards clarity and resilience. Investors are:

• Prioritising strong balance sheets, disciplined unit economics, and credible paths to profitability.
• Leaning more on debt and asset-backed instruments, reflecting a shift from pure growth-equity bets.
• Becoming more cautious with first or second institutional checks, making it tougher for early-stage, pre-revenue, or experimental ventures.

Regional leaders and sector signals

Egypt and Nigeria stood out through marquee transactions—particularly in fintech and mobility—while Morocco registered a significant proptech raise. Defence and clean energy-adjacent plays also appeared on the radar, suggesting investors are open to non-traditional tech verticals when revenue visibility is strong.

Outlook

Near-term funding is likely to remain concentrated in fewer, larger deals, with later-stage companies and capital-efficient models best positioned to attract investment. Early- and mid-stage founders may need to extend runway, tighten operating discipline, and explore alternative financing—convertible notes, venture debt, asset-backed structures—while preparing for diligence that scrutinises profitability timelines and cash flow stability.

Despite the slower start, January’s $174 million total and notable M&A moves suggest a market recalibrating rather than retreating: capital is present, but it is choosier, more structured, and focused on scale-ready businesses with clear unit economics.