There’s a remarkable shift happening in Africa’s tech investment landscape. According to recent data from research firm Briter, local investors now account for almost 40 percent of all tech startup funding on the continent, up significantly from about 25 percent just a few years ago. This change is shaping a more resilient and context-driven startup ecosystem that doesn’t rely as heavily on foreign capital.
Global Funding Has Slowed, But Local Capital Has Filled the Gap
Over the past few years, global investment into African tech has cooled. Foreign capital peaked around 2022, but has since dropped from nearly $5 billion to roughly $2.3 billion in recent years. That might have been destabilizing for a young ecosystem, but local investors stepped in instead. (TechCabal)
Local investors include venture capital firms, angel investors, and high-net-worth individuals headquartered in African countries. Their steady participation has helped keep funding flows strong even as global investors pulled back.
This shift matters for two big reasons:
- Capital is being allocated by people who deeply understand the markets they are investing in
- Funding decisions are influenced by real on-the-ground needs and opportunities, not just global venture trends
African Investors Bring More Than Money
Local backers are not just writing cheques. They often bring relevant networks, cultural understanding, and strategic guidance that purely overseas investors may lack. In many cases, this context-aware support has helped startups navigate local regulations, refine product-market fit, and grow faster within African markets. (TechCabal)
For example, Nigeria’s homegrown fintech Moniepoint scaled rapidly with strong backing and strategic help from local VCs, allowing it to deepen market penetration nationwide.
Local investors and angels are also increasingly driven by a sense of personal stake in their communities’ economic futures. Many are investing not just for financial returns but to help build infrastructure, jobs, and technology capacity that benefits their own regions.
Funding is Rebounding, But Challenges Still Exist
African startups raised about $3.6 billion in 2025, up 25 percent from the previous year, across 635 deals. That’s a sign of renewed investor confidence and growing market demand.
Yet the picture is nuanced:
- Early-stage funding is rebounding faster than growth-stage capital
- Late-stage and mega rounds remain limited, keeping the funding mix skewed
- Funding is heavily concentrated in the “Big Four” markets — Nigeria, Kenya, Egypt, and South Africa, which together absorb most investment dollars.
Smaller markets in Francophone Africa, such as Senegal and Côte d’Ivoire, are seeing growing deal counts but smaller capital rounds, which makes scaling harder without external support. (TechCabal)
The result is an ecosystem that is more resilient than a few years ago, but still facing structural gaps, particularly at later growth stages where large cheques and big exits are needed to fuel the next layer of scaling.
What This Trend Means in Practical Terms
For founders, this shift toward local capital has some real benefits:
- Faster decision making: Local VCs and angels often have a deeper understanding of regulatory, cultural, and economic realities in their markets.
- Better product alignment: Investments tend to focus more on solutions that match local needs, such as fintech for underbanked users or logistics tech tailored to African geographies.
- Ecosystem reinforcement: When local players succeed, their success can create a cycle of reinvestment into talent, infrastructure, and future startups.
At the same time, limited large-scale exits — such as sizeable IPOs or blockbuster acquisitions — mean capital recycling is slower, which can, in turn, constrain growth for homegrown VCs and funds.
Final Take for TechInsighter Readers
The rise of local investors accounting for nearly 40 percent of Africa’s startup funding is a turning point for the continent’s technology ecosystem. It shows that African tech is not just surviving the pullback in global capital, but adapting and maturing in ways that lean into local knowledge and sustainable growth.
This shift won’t solve all funding challenges overnight, but it signals a more self-sufficient, grounded investment environment — one where startups can grow according to the real needs of their communities, and where success breeds more success.
For anyone watching global tech markets, Africa’s model is worth a closer look as an example of how local investors can shape the future of innovation from the ground up.
If you want, I can also highlight which sectors local investors are focusing on most right now.