African start-ups raised $1.6 billion in debt, during the first nine months of 2025according to the African Private Equity and Venture Capital Association (AVCA).
This amount has already surpassed the total recorded for the entire year of 2024, which stood at $1 billion. Meanwhile, venture capital funds invested $1.4 billion in African start-ups, spread across 362 deals, a level almost stable compared to the same period in 2024.
This clearly shows the rise of debt financing, which is gradually establishing itself as an alternative to traditional venture capital in Africa.
Venture debt involves lending funds to start-ups with high growth potential, often as a complement to equity investments. Unlike classic venture capital (equity), where the investor takes a stake in the company, debt does not dilute the founders’ ownership. It thus allows start-ups to obtain liquidity for growth while retaining control of their structure.
According to the report, for the first time, the total amount of debt financing for the period exceeded that of equity financing, where start-ups give up a share of their capital to venture capital investors.
Geographical and Sectoral Distribution of Financing
East Africa has emerged as the leader in debt financing. Kenya captured 22% of the deals in the first nine months of 2025, double that of Egypt, Ghana, and Nigeria, which each accounted for about 11%.
The median value of debt transactions reached $7 million, slightly below the record of $7.5 million in 2024. For equity, the median investment value stands at $3 million, up 20% compared to the same period in 2024.
In venture capital, Southern Africa dominates in terms of transaction value, with 26% of the total, thanks to numerous financings exceeding $20 million.
North Africa ranks second (23%), ahead of West Africa (21%), East Africa (11%), and Central Africa (1%). Start-ups operating across multiple sub-regions (multi-region) account for 18% of the total value.
By sector, financial services account for 31% of investments, followed by information technology (20%), industry (13%), consumer goods (8%), and utilities (8%).
