4 industry experts say what has changed in raising a Series A in Africa 

Fewer than 10% of African startups that raise seed funding go on to secure Series A funding. In 2022, startups raised Series A within 18 months of their seed funding, but those in 2022 did so after 29 months, according to a Condia report.

2022 was the peak funding year. Now, the questions investors ask before writing a cheque have changed.

We spoke to four experts to get insights into what has changed in raising a Series A.

A higher financial performance bar 

The consistent theme among all investors was high profitability metrics. Before, it was a nice-to-have; now, it is an entry requirement. 

Joe Kinvi, Founder of Borderless, said,  “In 2022, at the height of ZIRP, many companies raised funds without real Series A fundamentals. Cheap capital was everywhere, so more companies raised more money than their traction warranted. Then the capital dried up towards the end of that year. Investors sobered up. And at almost the same time, African currencies underwent rapid devaluation. That hit a specific kind of company hard: those that are raised in USD but earn revenue in local currency. A startup that needed to hit $500K a month to qualify for a Series A now had to earn nearly double that in local currency terms to meet the same metrics.”

“The biggest shift was investor confidence and what investors were willing to fund. Between 2022 and 2025, there was a clear move away from flashy fintech ideas and aggressive growth narratives toward businesses that could demonstrate profitability, operational discipline, and sustainable scale,” said Ivan Kadiri, Associate Vice President – Business Development & Relationship Manager (Fintechs)

Folakemi Osho, General Manager, HoaQ, buttressed the point: “The winners in 2024/2025 were founders who treated Series A as validation of systems already working, not capital to fix broken ones. At the same time, conviction shifted from growth storytelling to reference density: multiple independent signals that the business would scale predictably.”

All this is evidenced by the fact that it’s the strong, foundational startups with proven unit economics that get this funding, and even so, it is usually a mix of debt and equity with a smaller ticket size.

Read also: From founders to funders: 12 Y Combinator alums backing the next generation of startups

Smaller ticket sizes 

The average Series A equity ticket size was $15m in 2022 and dropped to $8.7m in 2023. Several say global VC firms anchored it, and the ecosystem is maturing, hence the correction underway. It’s now gaining, as the 2025 average ticket size was $16.8m.

“By 2023, that changed materially. Series A became one of the hardest rounds to raise in Africa — deal frequency slowed, fundraising cycles lengthened, and many founders stayed in seed longer or raised bridge rounds instead. By 2025, while Series A activity had begun to recover, investors were underwriting very different fundamentals: retention, margins, governance, and clear paths to profitability. What changed wasn’t just the amount of capital available, but the quality bar required to access it,” said Founding Partner, HoaQ Nubi Kay.

For founders, this meant runway planning became conservative. Investors will likely favour staged tranches over large upfront rounds, as seen in Nala’s May 2026 raise.

The conversion rate between seed and Series A 

The seed-to-Series A pipeline collapsed significantly. The 2021-2023 seed cohort is converting to Series A at a lower rate than the 2019 cohort. 81 out of the 2022 seed cohorts have yet to raise a Series A after 28 months and counting.

Investors say seed capital was in surplus at the time and was given to startups that should have been funded, but now they haven’t matured enough to secure follow-on funding or a Series A round. “Over 100 startups raised a seed round in 2022, compared to just 42 in 2025. As fewer companies entered the funnel, the number that would naturally graduate to Series A declined accordingly.” Kinvi added 

Kinvi also claimed the funders moved up. “Early-stage investors who used to write pre-seed and seed cheques started chasing pre-Series A deals and beyond. That pulled capital away from the earliest stage, further tightening the top of the pipeline.”

The result is what industry leaders call the “missing middle”: a gap between seed-stage startups that did not make it to Series A and the few breakout startups that do.

Debt became a major source of capital 

Condia invited industry experts to a space to explain why this is the case. At the growth stage, it is mostly debt. Three years ago, debt financing was an afterthought, used primarily by fintechs managing loan books.

Venture debt across Africa reached $1.64 billion in 2025, accounting for 41% of all capital deployed.  Founders use debt to extend runway between equity rounds, avoid excessive dilution, and demonstrate capital discipline to Series A investors. 

Investors caution, however, that debt is not a substitute for equity at the earliest stages, and that founders who take on debt without understanding the repayment obligations have added a new category of risk to already complex businesses.

Rise of local capital

For years, the African startup ecosystem was dependent on foreign capital. Africa has witnessed the rise of local investor participation. In Bloomberg’s 25 startups to watch, the majority were funded by African investors. In 2025, local investors like Madica invested in more than two equity raises. In 2026, however, it’s mostly development finance institutions (DFIs)

Last updated: June 16, 2026