Despite a challenging global economic climate, African startups are showing resilience, though recovery in investment is proving uneven. A recent report by Dabafinance, published January 23, 2026, highlights this complex landscape, signaling a shift in investor priorities and a more discerning approach to funding. While the full extent of the recovery remains to be seen, the report offers crucial insights for our entrepreneurs navigating this evolving market and for investors seeking opportunities across the continent.
Investment Trends Reflect a Post-Reset Caution
The Dabafinance report indicates that the initial exuberance of previous years has tempered. We’ve seen a “market reset,” as the report terms it, meaning investors are now prioritizing profitability and sustainable growth over rapid expansion at all costs. This shift follows a period of significant funding in 2022 and 2023, which has now been followed by a more cautious approach. The report doesn’t detail specific figures, but suggests a more selective deployment of capital, focusing on sectors demonstrating clear paths to revenue generation.
Fintech Still Attracts Attention, But Competition Intensifies
While the report doesn’t break down sector-specific investment, it’s clear from broader trends that fintech remains a key area of interest for investors in Africa. However, the space is becoming increasingly crowded. Companies like Flutterwave have already demonstrated the potential of African fintech on a global scale, but new entrants face a tougher battle for funding and market share. We anticipate investors will be looking for fintechs offering truly innovative solutions, rather than simply replicating existing models.
Regional Disparities in Funding Access
According to Dabafinance, the recovery isn’t uniform across the continent. Some regions are experiencing a faster rebound in investment than others. The report doesn’t specify which regions are leading or lagging, but this unevenness underscores the importance of localized investment strategies. Investors like TLcom and Partech, who have a strong on-the-ground presence, are well-positioned to identify and support promising startups in these diverse markets. Access to capital remains a significant hurdle for many entrepreneurs, particularly those outside of the major hubs.
Building Africa’s Financial Infrastructure for Future Growth
Despite the current challenges, the long-term outlook for African startups remains incredibly positive. The continent’s young and rapidly growing population, coupled with increasing mobile penetration, creates a fertile ground for innovation. We are seeing the emergence of a new generation of African founders building solutions tailored to our unique needs, from mobile money platforms like M-Pesa to innovative agritech solutions. Continued investment, particularly from local and pan-African investors like Norrsken, will be crucial to building a robust financial infrastructure and unlocking the full potential of our entrepreneurial ecosystem.
