African Startups Shift Toward Equity as Debt Funding Falls

What changed

African startups raised $2.16 billion in equity and debt in the first nine months of 2026, just 4% below the same period last year. But the mix changed sharply: equity rose 23% to $1.5 billion, while debt fell 33% to $669 million.

Equity now accounts for about 69% of startup funding, up from roughly 55% a year earlier. That reverses a three-year drift toward borrowing.

Why it matters

This is a meaningful change in the financing deal available to young companies. Founders are seeing more investors willing to take ownership stakes again, even though the overall funding pool remains below the boom years.

The shift was especially clear in the third quarter. Startups raised $580 million in equity, 2.5 times the amount raised in Q3 2025. Moove’s $250 million Series C supplied a large part of that jump, but even without it, quarterly equity funding was still about 40% higher than a year earlier.

Other notable raises included:

• Jumia: $50 million
• Yellow Card: $40 million
• Paymob: $35 million
• Odyssey Energy Solutions: $27 million
• Moment: $22 million Series A

The debt decline needs a closer reading. It does not mean African startups have broadly stopped borrowing. Energy companies, historically a major source of startup debt, raised just $93 million in debt through September, down from $585 million in the same period of 2025.

Last year’s figures were also lifted by unusually large financings: d.light raised $300 million in debt, while Sun King raised $156 million in the third quarter alone. Without deals of that scale, the debt market looks much smaller.

That leaves 2026 as an equity-heavy year, but not a return to the old funding landscape. Debt still represents 31% of startup funding, compared with 45% in the first nine months of 2025. The more useful lesson is that a major financing trend has cooled, rather than disappeared.

Whether investors keep favouring equity beyond 2026 remains unclear. For now, the signal is straightforward: capital is still available, but the route to it is changing.