Africa’s Startups Reel as Tech Investors Withdraw

Africa’s Reliance on Foreign Investors for Mega Tech Deals

Africa’s tech sector has become increasingly dependent on foreign investors for large-scale funding, primarily due to the limited capacity of African private equity funds and venture capitalists to lead rounds of $100 million or more, commonly referred to as mega rounds. While there are notable African firms like Partech that invest in the growth stage of tech companies with a sizable fund of $265 million, their maximum individual investment per deal is capped at $15 million. The scarcity of African firm-led mega rounds is evident, with only a few exceptions such as AfricInvest’s $100 million investment in payments company Onafriq (previously MFS Africa) in 2021, a significant portion of which was raised as debt.