African Tech Firms Normalize Debt Funding As Startups Raise Record $1.64 Billion In Loans
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African startups raised $1.64 billion through debt financing in 2025, a record level that reflected growing lender interest as the continent’s tech market rebounded, Semafor reported.
Debt reached 40% of annual venture capital investment into African startups for the first time since Partech began tracking the data a decade ago, according to the report cited in the article.
Tidjane Deme of Partech Africa told Semafor the shift suggests startups are becoming more mature and predictable, adding that debt typically comes with a higher eligibility bar than equity.
Semafor said equity fundraising has recovered more slowly after dropping from around $5 billion in 2021–2022 to $2.3 billion over the last three years, even as debt use expanded.
The article said startups with steadier cash flow often use debt for working capital to limit dilution, though regular repayments can add risk to balance sheets.
Development finance institutions have been the main sources of venture debt in the past two years, Semafor said, while other lenders—including African commercial banks—are increasingly participating as more companies near profitability.
