Debt Dethrones Equity in African Tech

“My legal team is now reviewing the process that led to my purported termination, including its consistency with internal policies.“ - Ezra Olubi (Co-founder, Paystack), on his recent dismissal.

Happy Sunday! Here’s the week’s sharpest look at policy, markets and tech across Africa & beyond.

Kenya is weighing the creation of a standalone national e-commerce regulator after COMESA endorsed a model E-Commerce Policy to harmonize digital-trade oversight across Eastern and Southern Africa. Meanwhile South Africa launched a regulatory sandbox allowing startups to structure offshore IP while retaining local operations, a clear fix to unlock global capital without hollowing out the domestic startup base.

In funding flows: Kenya’s Chui Ventures wrapped a $17.3 M debut seed fund, shoring up early-stage deal capacity. At the same time, FSD Africa unveiled a $30 M Inclusive Insurtech Fund to back startup-led insurance solutions across underserved African markets.

On execution and sectoral momentum: Kenyan electric-bus operator BasiGo secured financing from Proparco to escalate its “Road to 1000” rollout after ferrying 9 million passengers. Globally, AI startups absorbed 51 % of worldwide VC funding in 2025, a shift already reshaping how investors allocate capital and setting a hard benchmark for non-AI ventures.

African tech funding once revolved around equity-driven sprints, but 2025 has turned that logic on its head. Debt, once the quiet footnote of Africa’s startup financing, has now overtaken equity as the continent’s primary growth engine, a reversal that signals not contraction, but recalibration. The shift matters because it reveals what investors trust in a market still shaking off two years of volatility: cashflows over narratives, operational discipline over scale-at-all-costs, and structured capital over speculative bets.

The backdrop is a slow but deliberate recovery. African startups pulled in $2.65 billion through October, up 56% from the same period in 2024, yet deal volumes remain flat, and a handful of outsized transactions dominate the totals. October alone saw $441.9 million raised, a 217% jump from September, but nearly 88% of that went to the top 10 deals. Capital is returning, but selectively, favouring proven operators with repeatable revenue and regional reach.

Debt is powering that resurgence. Spiro’s $100 million raise, Sun King’s record $156 million securitization, Moniepoint’s $90 million facility, and MNT-Halan’s $71.4 million bond all share the same architecture: structured lending, credit enhancements, and blended stacks built around banks and DFIs. The investor mix has changed too. Citi, ABSA, KCB, Cooperative Bank, Stanbic, FMO, Norfund, BII, and Afreximbank are driving the biggest transactions, evidence that Africa’s financial institutions, not foreign VCs, now set the tempo of late-stage capital.

Kenya sits at the center of this shift. Roughly 22% of Africa’s venture debt deals now originate from the country, powered by local-currency facilities, securitizations aligned with capital-market regulations, and a regulatory environment that quietly supports structured finance. This mirrors the region’s sector momentum: fintech and cleantech are scaling not through dilutive equity rounds, but through credit-backed growth that rewards predictable economics.

Takeaway: Debt forces discipline, tests unit economics, and widens the base of capital providers. For founders, it offers room to scale without surrendering ownership, but with sharper accountability. For policymakers and banks, it’s proof that Africa’s growth story is resilient enough to underwrite. And for investors, it marks a reset: the next phase of African innovation will be built less on hype cycles and more on financial architecture strong enough to survive them.

By 2013, Brian Chesky (CEO Airbnb) was still interviewing nearly everyone who joined the company. Not out of ceremony, but because he’d learned that one misaligned hire could nudge a young company off its axis.

So he asked the same quiet, disarming question: Would I want to work for this person someday? If the answer wasn’t a full-body yes, he passed. Many strong candidates didn’t make it through. Some were stars on paper; they just didn’t match the intent or temperament he was protecting. The team that formed was built slowly, deliberately, almost to a fault, but when the company later hit its roughest chapters, that early coherence held the center.

Chesky understood the quiet truth: culture isn’t drafted in values, it walks in through the door.