Equity mega-rounds have all but vanished. In their place, credit facilities, securitisations and local-currency loans are rapidly reshaping how the continent’s tech companies finance growth.
Last May, African startups raised roughly $235m in a single month. Fintechs and proptechs closed eight-figure equity rounds, global VCs wrote large cheques, and the continent’s year-to-date total surged past the $1bn mark.
This May tells a radically different story. Disclosed funding across 16 transactions totalled just $54.2m, pushing the year-to-date figure to $793m. On the surface, the numbers point to a sharp contraction. But aggregate volume is a poor lens. Strip away the headlines and a structural shift emerges that could prove more consequential than any single mega-round.
Debt — not equity — accounted for 77% of all capital raised in May. That is not a rounding error. It is a deliberate pivot, and one that the data suggests is accelerating.
The deals that shaped the month
The largest single ticket was a $25m credit facility secured by Tanzanian payments infrastructure company NALA. The facility, provided by AI-driven private credit provider Liquidity and arranged through a joint venture with MUFG Bank, allows NALA to pre-fund customer accounts and meet demand that has at times outstripped its balance sheet. It carries an option to scale to $50m.
NALA confirmed it still holds more than half of the $40m equity round it raised in mid-2024. The credit line, therefore, becomes a way to deploy capital strategically without accelerating shareholder dilution.
That transaction was not an outlier. Nigerian fintech Sycamore Integrated Solutions closed a ₦6.89bn (roughly $5m) Series-1 commercial paper issuance, arranged by BAS Capital. The offer was 2.3x oversubscribed, a sign of institutional appetite for high-governance fintech debt. Sycamore will use the proceeds to grow its loan book for small and medium-sized enterprises.
In mobility, Metro Africa Xpress (MAX) secured an $8m debt facility from Dutch impact investor Triple Jump. The capital is earmarked to scale its electric-vehicle fleet under an asset-backed lending model. Verdant IMAP, the pan-African investment bank, advised on the deal.
The agritech sector produced a landmark. Kenyan fintech platform Kaleidofin partnered with Apollo Agriculture and the IDH Farmfit Fund to close a KES 276m ($2.1m) securitisation — the country’s first private-sector, local-currency securitisation of smallholder farmer loans. By bundling thousands of micro-loans into a single, rated note, Apollo offloaded balance-sheet risk, accessed immediate liquidity and sidestepped foreign-exchange volatility.
Smaller debt instruments added to the trend. For example, Ghanaian logistics platform VDL Fulfilment accepted a $150,000 convertible note and milestone-based debt from Village Capital.
Together, these debt transactions accounted for $41.7m of the $54.2m monthly total.
Equity didn’t disappear — it just shrank
Equity rounds did close in May, but none crossed the $10m threshold. Egyptian ride-hailing platform ARRW raised $4m from local investor Tasheed Egypt to challenge multinational incumbents. Cauridor, a Guinea-based cross-border payments company, added $2m in equity from Proparco, joining existing backers Flourish Ventures and LoftyInc Capital in its ongoing Series A. South African medtech Mia Healthcare Technologies raised R15m ($910,000) from the Vumela Fund, among others.
Other rounds, including those for Tunisian insurtech EYST and Tanzanian last-mile fintech Flowteller, were left undisclosed.
Why debt now?
The shift is not accidental. Several forces are converging.
First, a growing number of African startups have built governance structures and predictable revenue streams that allow them to access formal credit markets. Sycamore’s oversubscribed commercial paper would have been unthinkable three years ago. Today, institutional investors are comfortable underwriting a fintech balance sheet, provided the company accepts rigorous reporting and risk controls.
Second, founders are actively choosing to preserve equity. NALA’s decision to lean on a credit facility while sitting on more than half of its 2024 equity round is a case in point. In a market where exit paths remain narrow and valuations are under pressure, avoiding dilution is not just preference — it is defence.
Third, asset-heavy business models are scaling. EV fleet operators like MAX and Flot, agri-processors like Tomato Jos, and smallholder lenders like Apollo need capital to purchase physical assets that generate predictable receivables. Debt, secured against those assets or loan books, is a natural fit.
The Apollo securitisation deserves special attention. It transforms illiquid micro-loans into a tradeable instrument that can be priced, rated and sold to institutional buyers. If the structure can be replicated across other geographies and crop cycles, it could unlock a deep pool of local-currency funding that has long been out of reach for African agritechs.
The other side of the coin
The May data is not an unequivocal victory. A month without a single equity round above $10m also raises questions. Some companies still require risk-bearing venture capital to fund research, customer acquisition or market entry before they can support debt. If global VCs — burned by currency depreciation, liquidity challenges and a lack of exits — continue to retreat, a segment of early-stage, capital-hungry startups may struggle to bridge the gap between grant and credit.
The year-to-date decline from more than $1bn to $793m also suggests that the overall quantum of capital flowing into the ecosystem has not simply migrated from equity to debt; some of it has genuinely thinned. Cauridor’s Series A, for instance, is still trying to close at $13m by year-end, and that process is taking longer than the 2025 vintage would have required.
Geography also tells a story. In 2025, Egypt dominated headlines with rounds from Nawy, Thndr, Sylndr and MoneyFellows. This May, Egypt appeared only once (ARRW). The capital flowed instead to Nigeria, Tanzania, Kenya, Ghana, Côte d’Ivoire and Guinea. A broader distribution of funding is a positive sign for the continent’s depth, but it also means fewer concentrated pools of growth-stage capital.
A shift in who is writing the cheques
The investor composition in May 2026 is as instructive as the instrument mix. Gulf venture capital and US-based funds — which drove a significant portion of African startup equity in 2025 — are largely absent from May’s deal log. In their place: European development finance institutions, domestic capital, and structured finance providers.
Triple Jump (Netherlands), Proparco (France), Village Capital, FMO and RVO (both Netherlands, backing Rivia Clinics), and the IDH Farmfit Fund all appeared in May transactions. Domestic and regional investors — Sabou Capital in Nigeria, Tasheed Egypt, Vumela/FNB in South Africa, 216 Capital in Tunisia — backed local companies directly. MUFG Bank, Japan’s largest bank, provided institutional weight to NALA’s facility through the Mars Growth Capital vehicle.
The pattern suggests that the retreat of global VC from African markets has not produced a vacuum so much as a substitution — with development finance and domestic capital absorbing deal flow at lower ticket sizes and through instruments that suit their mandates.
Reading the shift
The 78% debt share in May is not, on its own, evidence of a funding crisis. Founders accessing debt rather than equity are not necessarily doing so from a position of weakness. NALA, which still holds the majority of its 2024 equity raise, chose a credit facility precisely to avoid dilution at a moment when its balance sheet could support the decision. MAX is using debt to scale an asset-heavy fleet in a way that equity alone would price inefficiently. Sycamore tapped the commercial paper market and found 2.3 times more demand than it sought.
The more pertinent question is whether the compression in equity rounds — both in size and number — reflects a temporary absence of equity capital from the market, or whether founders are increasingly choosing not to raise it. The answer has different implications for valuations, ownership structures, and the pipeline of companies likely to reach Series B and beyond over the next two to three years.
May 2026 does not answer that question. It raises it with some precision.
Data: Launch Base Africa | All figures in USD unless stated. Undisclosed deals (EYST, Flowteller) excluded from quantitative analysis.