African start-up funding opened 2026 on a weak note, with total capital raised dropping sharply in January as deal activity hit a record low, underscoring growing investor caution across the continent.
According to a report by Africa: The Big Deal, start-ups across the African continent, raised a total of $174 million in funding in January 2026 through disclosed deals of $100,000 and above, spanning equity, debt, and grants, excluding exits.
This figure represents a sharp decline compared to January 2025, when start-ups raised $276 million, and is also well below the $263 million monthly average recorded over the previous 12 months.
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Despite the slowdown, January 2026 still performed better than earlier down years, surpassing January 2023 ($106m) and January 2024 ($85m). However, a more troubling signal emerged from deal activity: only 26 start-ups announced funding rounds of at least $100,000 during the month.
This is just over half of both the monthly average over the past year and the tally recorded in January 2025. On this metric, January 2026 marks the lowest monthly count on record since at least 2020.
Funding was concentrated among a small number of large deals. The top raiser was Egyptian fintech valU, which secured $64 million in debt financing from the National Bank of Egypt (NBE),which is a significant step in its growth and expansion plans. This financing agreement allows Valu to strengthen its funding base and support its regional growth, particularly in Jordan.
This was followed by MAX, a Nigerian mobility financing start-up, which raised $24 million through a mix of equity and asset-backed debt. This funding round includes participation from Equitane DMCC, Novastar, Endeavor Catalystand others, alongside asset-backed debt from the Energy Entrepreneurs Growth Fund (EEGF).
The capital will be used to scale its electric vehicle fleet, expand battery swapping and clean energy infrastructure, and support regional expansion across West and Central Africa.
Four additional start-ups closed equity rounds of $10 million or more. These included NowPay (Egypt, fintech), which raised $20 million; Yakeey (Morocco, proptech), which secured a $15 million Series A; Terra Industries (defence), which raised $12 million; and Cauridor (Côte d’Ivoire, fintech), which also closed a $10 million-plus round.
On the exit front excluded from the funding totals three notable transactions were announced in January. Flutterwave acquired Nigerian fintech Mono in an all-stock deal valued at around $30 million. Savannah, a tech talent start-up, was acquired by Commit, while Izili Group completed the acquisition of Qotto, an off-grid solar company.
Outlook
Looking ahead, the January data points to a cautious start to 2026 for Africa’s start-up ecosystem. While capital continues to flow into later-stage or asset-backed opportunities, particularly in fintech and mobility, early-stage activity remains under pressure, reflected in the historically low number of funded start-ups.
Investors appear increasingly selective, prioritizing clear revenue models, capital efficiency, and paths to profitability over rapid expansion.
That said, the year is not without upside potential. Improving macroeconomic stability in some key markets, a gradual easing of global interest rates, and continued corporate and bank-led financing could support a modest rebound in funding volumes as the year progresses. Exits such as acquisitions also signal that strategic buyers remain active, which may help restore confidence.
Overall, while funding levels may recover unevenly in 2026, the near-term outlook suggests a more disciplined and concentrated investment environment, where fewer start-ups raise capital, but those that do are likely to be stronger, more resilient businesses.