African startups have raised approximately $2.16 billion in the first nine months of 2026, according to Africa: The Big Deal, an independent research platform tracking startup investment across the continent. However, the number of companies securing investments of at least $100,000 fell by 18% compared with the same period last year. This trend raises questions about the depth of Africa's investment ecosystem and the ability of businesses to access funding.
The distribution of funding across Africa is uneven, with Nigeria attracting $635 million in startup funding during the first nine months of 2026, followed by Egypt at $445 million. Kenya recorded $201 million, a 73% year-on-year decline, while South Africa attracted $182 million, down 58%. These figures suggest that a relatively small number of companies are securing large investments, leaving many businesses without access to funding.
South Africa's figures are particularly concerning, with only 34 startups securing investments of at least $100,000 during the first nine months of 2026, a 36% decline year on year. For a country with an established financial services sector and experienced entrepreneurs, these figures raise broader questions about the conditions needed for businesses to grow. Access to capital is one part of that equation, but other factors such as access to banking services, reliable payment infrastructure, and regulatory certainty are also important.
Faadil Moti, Co-Founder and CEO of 80eight, a financial technology platform, has experienced the challenges of building a business without external investment. After eight years of building independently, Moti's company processes approximately R300 million ($18 million) in monthly transaction volume. He emphasizes the importance of understanding a business's economics and the trade-offs that come with delayed hiring, slower development, and missed opportunities.
Moti's experience has also reinforced the importance of accessing capital at the right stage. A business can have customers, established operations, and a viable expansion strategy, yet still face limitations in how quickly it can grow using its own resources. External investment can help bridge that gap, allowing companies to pursue opportunities that might otherwise take years to realise.
The conversation around African entrepreneurship often focuses on venture capital rounds, overlooking the broader financing requirements of companies that are already generating revenue and looking to expand. Investors need to examine the fundamentals behind growth, including transaction volume, revenue, and profitability, to identify businesses with the potential to grow beyond their current scale.
Ultimately, the real value of investment lies in helping businesses achieve lasting growth, with a focus on financial sustainability, strong governance, customer trust, and building an institution capable of lasting beyond its founders. By rethinking how African growth is financed and providing more nuanced support to businesses, investors can help unlock the full potential of Africa's entrepreneurial ecosystem.
Key points
- African startups raised $2.16 billion in the first nine months of 2026, but fewer businesses are securing funding.
- South Africa's startup funding declined by 58% year-on-year, with only 34 startups securing investments of at least $100,000.
- Access to capital is only one part of the equation for businesses to grow, with other factors such as access to banking services, reliable payment infrastructure, and regulatory certainty also important.
