African Startups Face Early-Stage Funding Squeeze as H1 Deals Drop Despite $1.4 Billion Raised
Updated
Updated · Semafor · Aug 5
African Startups Face Early-Stage Funding Squeeze as H1 Deals Drop Despite $1.4 Billion Raised
3 articles · Updated · Semafor · Aug 5
Summary
$1.4 billion flowed to African startups in the first half, roughly flat year on year, but deal counts fell sharply, leaving seed and Series A companies with fewer chances to raise.
VC firms are steering capital toward later-stage businesses with revenue, scale and clearer exit paths as investors demand cash returns over paper gains after the zero-rate era ended.
That shift is pushing even early-stage backers to rethink strategy: 4Di Capital is weighing later-stage secondary purchases beyond its current $20 million fund, while Norrsken22 may use secondaries to fill deal gaps from its $205 million vehicle.
Partech said 2025 growth-stage average checks reached $50 million after a 25% annual rise, reinforcing a post-2022 pattern in which mature startups capture more capital while newer ventures stay constrained.
Investors still see pockets of resilience, with TLCOM keeping about 80% of its capital in early-stage deals, but weaker angel networks and accelerators are limiting the pipeline of venture-ready African startups.