African startups secure $135m in May as debt, equity compete

African venture funding showed signs of resilience in May, with 37 startups announcing a combined $135 million capital raise from equity, debt and grants.

The rebound in deal activity, up from 32 deals in April and 22 in March, signals recovery, though volumes remain below the 12 month average of 45 deals/month.

From a funding perspective, Africa: The Big Deal May outpaced April’s $110 million but trailed March’s $150 million, and sat well below the 12 month average of $255m/month.

The most telling signal lies in the funding mix. May’s totals were split almost evenly between equity ($65 million) and debt ($68 million), with $2 million in grants. This balance reflects a broader market transformation: just 12 to 18 months ago, equity dominated with a 70 per cent share. Now, debt has emerged as a stabilising force, keeping totals afloat.

In the period under review, 22 ventures raised equity, seven ventures raised debt, and eight ventures raised grants.

Year-to-date, African startups have raised $843 million across 160 deals, split nearly evenly between equity and debt, underscoring the ecosystem’s “new normal.”

Four transactions accounted for nearly three-quarters of May’s funding. These are Nala, which secured a $50 million credit facility, LemFi extended its Series B with $30 million, Africa GreenCo raised $10 million, and Bfree closed a $10 million round.

Meanwhile, exits added another layer of activity. Ghana-born insurtech pioneer Bima was acquired for $119 million, a reminder that liquidity events continue even in muted fundraising months.

West and East Africa dominated, attracting 85 per cent of May’s funding, with Nigeria alone accounting for 64 per cent of all equity raised.

Sector-wise, fintech once again led the charge, powered by Nala and LemFi’s large tickets.

May’s profile shows 30 to 40 deals/month, $100 million to $200 million totals, debt as a stabiliser, reflecting a softer market compared to 2025’s 50 deals/month and $300m/month run-rate, when equity was the clear driver.

Still, optimism lingers, where June opened with Spiro’s headline announcement, hinting at stronger H1 numbers ahead.