Africa Finance Corporation has approved a commitment of up to $100 million to invest in Africa-focused technology fund managers, in a move aimed at increasing local institutional participation in the continent’s fast-growing venture capital ecosystem.
The AFC disclosed this in a statement released on Monday.
The investment comes as Africa’s digital economy is projected to contribute more than $700 billion to the continent’s GDP by 2050, driven by a rapidly expanding digital population and rising technology adoption by businesses.
According to AFC, the new capital commitment is designed to address the persistent shortage of long-term institutional funding that continues to limit the growth and scaling of African technology companies despite increasing investor interest in the sector.
The corporation said it would deploy catalytic capital into leading Africa-focused technology funds, with particular emphasis on African-owned fund managers, in a bid to deepen local ownership within the venture capital ecosystem and reduce dependence on foreign investors.
Speaking on the development, AFC President and CEO, Samaila Zubairu, said Africa’s youthful population and rapid adoption of technology present a strong investment case for digital infrastructure and innovation.
“AFC’s US$100 million Africa-focused Technology Fund will accelerate the convergence of growing demand, rapid technology adoption, youthful demographics and the enabling infrastructure we are building,” Zubairu stated.
According to him, digital infrastructure is now as fundamental to Africa’s transformation as roads, rail, ports and power — enabling productivity, payments, logistics, services, data and cross-border trade, while creating jobs and industrial scale.
Africa’s venture capital market has recorded significant growth in recent years, producing nine unicorns while African startups attracted about $3.8 billion in funding in 2025 alone.
AFC noted, however, that local institutional investors remain largely absent from many venture capital fund structures, with international investors still dominating the market.
As part of the first phase of deployment, AFC disclosed that it has already made anchor commitments to Lightrock Africa Fund II and Future Africa Fund III.
The corporation said the investments position it across the full innovation lifecycle, ranging from early-stage venture capital to growth-stage technology scaling.
AFC added that the current commitments represent the first tranche of a broader investment pipeline, with additional Africa-focused fund commitments expected in the near future.
Managing Partner and CEO of Lightrock, Pal Erik Sjatil, described AFC’s investment as a reinforcement of an existing partnership focused on backing high-growth technology-enabled businesses across Africa.
According to him, the collaboration reflects a shared conviction in supporting scalable companies with strong fundamentals, proven business models and clear profitability pathways.
Future Africa, whose portfolio includes several notable African technology startups, said AFC’s investment would strengthen innovation financing at the early-stage end of the market, particularly for startups operating in financial inclusion, digital infrastructure, consumer technology and education.
Founding Partner of Future Africa, Iyin Aboyeji, said the investment signals growing recognition of digital infrastructure as a key pillar of Africa’s economic transformation.
He added that AFC’s backing as the fund’s first multilateral development bank partner could encourage more development finance institutions, pension funds, insurers and other institutional investors to increase their exposure to Africa’s technology ecosystem.
After the 2021/2022 boom time, funding for African startups has slowed over the years.
For April 2026, Nairametrics reported that African startups raised a total of $110.4 million across 34 disclosed deals, a 26.6% decline compared to $150.5 million raised across 27 deals in March 2026.
Although the number of deals increased compared to March, overall funding volumes weakened further, reflecting continued caution among investors amid tighter liquidity conditions and growing preference for sustainable business models.
