African startup deal activity weakened again at the start of 2026, with the number of disclosed funding rounds falling back toward levels last seen in the early years of the decade, underscoring how far the market remains from its 2022 peak despite pockets of resilience in funding volumes.
Data from Africa: The Big Deal shows that African startups recorded 26 disclosed funding deals of $100,000 and above in January 2026, down sharply from 40 deals in January 2025 and well below the 45-plus deals recorded in January 2022, which marked the height of the continent’s venture capital boom.
While January 2026 does not represent a record low as deal counts were weaker in January 2024 (about 21 deals) and similarly subdued in January 2023 (around 22–25 deals), it confirms that funding activity remains stuck near post-2020 trough levels, compared with roughly 30 deals in January 2021 and 28 in January 2020.
Read also: Google seeks AI-driven African startups as accelerator enters 10th cohort
The figures highlight a funding environment in which investors are backing fewer startups than in recent years, pointing to continued caution in deal-making even as capital concentrates around a smaller number of more established companies.
In funding terms, African startups raised a combined $174 million in January, a total that, while higher than the amounts raised in January 2023 and 2024, fell sharply from $276 million raised a year earlier and remained well below the 12-month monthly average of $263 million.
Deal-making slows despite available capital
The sharp fall in deal count suggests that the slowdown is less about the absence of capital and more about how narrowly it is being deployed.
Investors appear increasingly focused on backing fewer companies with clearer revenue profiles, stronger balance sheets and lower perceived risk.
Egyptian fintech valU led January’s funding activity, raising $64 million in debt financing from the National Bank of Egypt. In Nigeria, mobility financing startup MAX secured $24 million through a combination of equity and asset-backed debt.
Four other startups raised equity rounds of $10 million or more during the month: NowPay in Egypt ($20 million), Yakeey in Morocco ($15 million Series A), Terra Industries ($12 million), and Cauridor in Côte d’Ivoire (fintech).
Read also: African startups’ corporate VC hits three-year peak with 44% jump in deals
Together, these six companies accounted for a substantial share of the capital raised in January, masking the sharp decline in the number of startups able to close funding rounds.
Early-stage funding pressure intensifies
While month-on-month slowdowns between December and January are not unusual in Africa’s startup ecosystem, similar dips were recorded in 2023, 2024 and 2025, the collapse in deal volume points to a more pronounced squeeze on early- and mid-stage startups.
Seed and Series A companies, particularly first-time fundraisers, appear to be facing heightened scrutiny as investors prioritise follow-on funding for existing portfolio companies and favour financing structures that limit downside risk, including debt and asset-backed instruments.
The market is still open, but the bar has moved. Startups need to show traction much earlier than they did a few years ago.”
Exits offer limited counterweight
January also saw several notable exits, though these were not included in the funding totals. Payments firm Flutterwave acquired Nigerian fintech Mono in an all-stock deal estimated at around $30 million, while tech talent startup Savannah was acquired by Commit. Izili Group also acquired off-grid solar company Qotto.
While exit activity suggests growing consolidation in fintech, talent and climate-tech, it has yet to translate into a meaningful rebound in early-stage deal flow.
Read also: Investor confidence soars as African Startups raise $2.2bn in 2025 funding
What the data signals for 2026
A weak January does not necessarily define the year ahead. Historically, funding activity across Africa tends to pick up from the second quarter as global investors deploy capital more actively.
However, the lowest deal count since at least 2020 raises questions about whether Africa’s startup ecosystem is entering a more structurally constrained phase, one in which capital remains available, but accessible to far fewer founders.
For startups heading into 2026, the message is that securing funding is becoming less about market timing and more about demonstrating resilience, revenue traction and a clear path to sustainability in an increasingly selective investment climate.
