Behind the high-stakes deal-making summits across Africa’s sprawling tech landscape, an older engine is quietly powering back up. As the global funding gloom bites and venture capitalists who once flocked to the continent look on with growing caution, tech founders are increasingly seeking detours. Deals have become picky, with capital retreating deep into infrastructure or sitting on the sidelines entirely.

Nestled in this gap are investment banks and advisory firms. Operating far from the venture hype, these entities are securing pricey consultations and record closings by offering an alternative to the traditional VC route. One such firm proving the viability of this approach is Verdant Capital, which has quietly arranged more than 60 transactions across Africa over the past years — not by choosing between advisory work and investing, but by doing both.

The “missing middle” dilemma

This week, Polysmart Packaging Group, the Nigerian plastic bottle recycler, announced it had raised $5m to expand its food-grade production capacity. Structured by Verdant Capital, the deal provided the Ogun State-based company with capital from a private investment vehicle — enabling it to bypass the constraints of a traditional blind-pool fund.

Verdant’s approach isn’t strictly advisory or purely investment — it’s both. The Johannesburg-based firm runs an investment bank earning fees for arranging third-party capital, alongside a fund that writes checks from its own balance sheet into structured debt and mezzanine investments.

In a market choked by liquidity constraints, running two parallel operations makes practical sense.

The investment side, Verdant Capital Hybrid Fund, issues mezzanine and structured debt to financial inclusion startups. Fresh off a $15m injection from Impact Fund Denmark in January 2026, the vehicle channels cash through local banks, microfinance institutions, and fintechs across 10 countries.

The firm’s advisory wing, Verdant IMAP, pulls in fees by matching companies with outside investors. The two sides feed into each other. Advisory work generates data that informs the fund’s investments, and fund portfolio companies often grow into advisory clients looking for M&A help.

The past year shows how the pieces fit together:

• On the investment side: The Hybrid Fund wrote a $3m check in July 2025 for Bfree, a Nigerian ethical debt collection fintech, blending venture debt with technical assistance. That followed a $2m investment into South African fintech USPlus.
• On the advisory side: Verdant stepped in last April to help Ghanaian remittance fintech Zeepay raise $18m. It was a pure advisory mandate, earning fees off a fast-growing asset that was too large and equity-focused for Verdant’s own debt fund. Before that, Verdant structured a $10m pre-Series B for Ugandan asset-finance platform Tugende, pulling in equity from Women’s World Banking Asset Management alongside debt from Cordaid.

The economics of the hedge

While Verdant Capital does not disclose its precise fee structure, the logic of its hybrid model is straightforward: diversify revenue across advisory fees and investment income to cushion market swings.

Investment banking revenues in sub-Saharan Africa remain uneven. According to LSEG data, total fees reached an estimated $169.3m in the first half of 2025. Within that pool, however, equity capital markets (ECM) fees fell 66% year-on-year to $5.5m, while syndicated lending fees rose 28%, reflecting a shift toward debt. South Africa accounted for roughly 47% of total regional fees during the period, underlining how concentrated activity remains.

The volatility is not new. Advisory fees on completed M&A transactions hit a three-year high of $41.4m in the first quarter of 2022 alone — a 163% increase on the prior year — demonstrating how quickly the fee pool can expand in stronger cycles.

Verdant operates in a different tier from the bulge-bracket banks that typically top regional league tables. In Q1 2022, Goldman Sachs earned $11.4m in sub-Saharan African investment banking fees, capturing an 11.7% share of the total pool, largely from cross-border mandates. Standard Chartered, JPMorgan Chase and Citigroup have also consistently ranked among the region’s leading fee earners.

Boutiques such as Verdant typically generate smaller absolute fees but focus on lower ticket, growth-stage transactions where sector expertise and structuring capability are central. Market practice for African mid-market deals suggests advisory fees of between 2% and 5% of transaction value, often combining an upfront retainer with a success fee on completion. On a $5m transaction such as Polysmart’s, that would imply fees in the range of $100,000 to $250,000.

Running a debt-focused fund alongside the advisory arm adds a second revenue stream. While advisory mandates generate fee income without balance-sheet exposure, the fund produces recurring interest income and potential upside through performance-linked instruments. In weaker equity markets, that combination offers a degree of insulation from the cyclical downturns that typically affect IPOs and large-cap ECM activity.

Verdant is not the only firm capitalizing on the continent’s shifting capital dynamics. Across Africa, specialized advisory firms are orchestrating the ecosystem’s largest rounds:

• EKTA Partners: The London-based firm recently advised digital bank Tyme on a $250m equity raise — the largest fintech round in Africa and South-East Asia this year, securing capital from Nubank and M&G Investments Catalyst. This follows their work on Sun King’s $330m raise in 2022. EKTA specializes in Series B-D rounds ranging from $25m to $300m.
• FT Partners: The San Francisco-based fintech specialist acted as the exclusive financial and strategic advisor for Moniepoint’s $110m equity financing. Led by Development Partners International and the Google Africa Investment Fund, the deal highlights FT Partners’ grip on later-stage, high-growth African fintechs.

As venture capital normalizes to pre-boom levels, the distinction between a fund and an adviser is becoming secondary to execution. In a market where capital is scarce and execution risk remains high, the hybrid “fees plus fund” model is no longer just a detour for founders — it is rapidly becoming the main road.