The African tech ecosystem faced a notably quiet opening to 2026, recording its lowest monthly deal volume in over six years.
According to the latest report from Africa: The Big Deal, only 26 startups across the continent announced funding rounds of $100,000 or more in January.
This “deal desert” represents just over half of the monthly average for the previous year and highlights a significant shift toward investor caution as the market recalibrates.
Despite the record-low deal count, the total funding amount for January reached $174 million.
While this figure is a 37% decline from the $276 million raised in January 2025, it actually outperformed the totals from January 2023 ($106 million) and 2024 ($85 million).
The report suggest that the lower deal volume indicates capital is being concentrated into fewer, larger transactions—prioritizing established ventures with clear revenue paths over a broad range of early-stage startups.
The month’s funding landscape was largely dominated by late-stage debt and equity wins in Egypt and Nigeria.
Egyptian fintech firm valU led the continent with a $64 million debt facility from the National Bank, while Nigeria’s mobility financing startup MAX secured $24 million through a mix of equity and asset-backed debt.
Other significant rounds included Egypt’s NowPay raising $20 million, Morocco’s Yakeey securing a $15 million Series A, and the defense tech firm Terra Industries raising $12 million.
While primary funding was subdued, the Mergers and Acquisitions (M&A) space remained a hive of activity, signaling a trend of strategic consolidation.
Nigerian fintech giant Flutterwave acquired Mono in an all-stock deal valued at approximately $30 million.
Other notable exits included the acquisition of tech talent startup Savannah by Commit and the purchase of off-grid solar provider Qotto by Izili Group.
This movement suggests that while new checks are harder to come by, the market is maturing as larger players absorb smaller ones to build scale.
This slow start follows a resilient 2025 where total funding on the continent reached $4.1 billion, a 25% year-on-year increase.
Kenya emerged as the top destination in 2025, capturing over $1 billion in capital, largely driven by cleantech and massive debt financing rounds.
As 2026 begins, the focus has shifted toward “defensive” sectors like energy, logistics, and revenue-backed fintech, where unit economics and profitability are now valued far above rapid, unchecked expansion.
