African startups raised more than $711 million across over 80 disclosed deals in the first quarter of 2026, according to TechCabal Insights tracking, demonstrating continued investor appetite for the continent’s technology ecosystem despite global economic headwinds and currency volatility in key markets. The capital flowed through a healthy mix of equity, debt, and grant funding, with fintech attracting $221 million, the energy and water sector securing $141 million, and logistics and transport following closely with $149 million in total investment.
From a sectoral perspective, the dominance of fintech and energy confirms that investors remain focused on solving foundational challenges in financial inclusion and infrastructure. Egypt led the capital race with $154 million, followed by South Africa at $134 million, with Kenya and Nigeria rounding out the top four. This geographic distribution reflects the maturity of North Africa’s startup ecosystem, the resilience of South Africa’s venture capital market, and the continued potential of East and West Africa’s largest economies despite regulatory and macroeconomic headwinds.
The quarter also witnessed significant merger and acquisition activity, with over 30 deals tracked. Notable moves included Flutterwave’s acquisition of Mono and Moniepoint’s expansion into Kenya via Sumac Microfinance Bank, indicating that larger players are now buying their way into new markets and product lines rather than building organically. This trend suggests a maturing ecosystem where consolidation becomes a viable exit pathway for early-stage investors and founders.
However, the quarter was also marked by painful restructuring and market exits. Kenyan climate tech firm KOKO laid off its entire 700-person team and shut down following a government dispute over carbon credit sales. Jumia exited Algeria, Uber ceased operations in Tanzania, and long-standing names including Showmax announced closures. Neobank Kuda laid off over 100 employees, while Zap Africa cut 44 per cent of its workforce in an AI-driven restructuring. These developments highlight that capital access remains uneven, and operational stability is far from guaranteed.
On the expansion front, 18 companies broadened their geographic footprints. Lemfi extended payment services into Australia and Canada, MoneyHash entered the Iraqi market, and Auto24 and Payaza deepened their presence in Rwanda and Uganda. For Nigerian startups, the Q1 data signals both opportunity and caution. The country remains a top-four destination, but sustaining that position requires navigating currency depreciation, regulatory uncertainty, and intensifying competition from regional peers.
