Grace Ashiru
After two years of decline, African tech funding crossed $3 billion in 2025—a 36% jump from 2024’s $2.2 billion. Publications across the continent celebrated the “remarkable comeback,” pointing to mega-rounds exceeding $50 million as proof that investor confidence had returned.
But scan the list of 2025’s top 10 largest capital raises and something unusual appears: at least five of these headline-grabbing “funding rounds” weren’t equity investments at all. They were debt facilities, securitizations, and receivables financing—financial instruments that operate on fundamentally different logic than venture capital.
The distinction matters. When venture capital flows into a startup, investors are betting on exponential growth and accepting the risk of total loss for the chance of 10x returns. When lenders provide debt or structured finance, they’re extending capital against proven assets and expecting predictable repayment. One is risk capital available to early-stage companies. The other is available only to businesses that have already scaled.
The Deals That Changed the Math
Sun King’s $156 million topped many “largest rounds” lists in July. The Kenya-based off-grid solar company made headlines as the first majority commercial-bank-backed securitization of its kind in Sub-Saharan Africa outside South Africa.
But securitization isn’t equity funding. Sun King packages the payment receivables from 1.4 million customers buying solar systems on installment plans, then sells those future cashflows to lenders—ABSA, Citi, Co-operative Bank of Kenya, KCB, and Stanbic provided the senior tranches, while development finance institutions British International Investment, FMO, and Norfund provided mezzanine financing. The lenders advance capital now and collect as customers make payments over time.
This is structured finance treating proven cashflows as collateral. Five commercial African banks wouldn’t have participated if this involved venture risk. They’re not betting on Sun King’s growth potential—they’re essentially buying bonds backed by contractual customer obligations.
Wave’s $137 million raise in June followed a similar pattern. Senegal’s mobile money unicorn, which serves 29 million monthly users across eight West African markets, secured debt financing led by Rand Merchant Bank with participation from development finance institutions including British International Investment, Finnfund, and Norfund.
Debt financing means Wave borrowed money it must repay with interest. No equity dilution. No new investors betting on 10x returns. This is corporate borrowing—the kind established businesses use for working capital—not venture funding. The only difference? Tech media covered it as a “mega-round.”
SolarAfrica’s $98 million was explicitly labeled project finance for the SunCentral solar installation—the first 144 megawatts of a planned 1-gigawatt solar power generation project in South Africa. Project finance is infrastructure debt secured against a specific asset. Lenders analyzed the solar installation’s projected electricity generation, secured power purchase agreements, and calculated returns over 20 years—then extended capital against those predictable cashflows.
It’s not funding a tech startup’s growth. It’s financing construction of an asset with known revenue potential.
Nawy’s $75 million was celebrated as one of the largest Series A rounds ever recorded for an African startup. Egyptian proptech Nawy combined $52 million in equity from Partech Africa with $23 million in debt from major Egyptian banks.
That $23 million debt portion isn’t venture capital—it’s bank loans that Nawy must repay with interest. Egyptian banks assessed Nawy’s revenue (over $1.4 billion in gross merchandise value by end of 2024), saw profitability, and extended credit facilities. When media reported Nawy’s “$75 million raise,” they aggregated two fundamentally different capital sources into one headline number.
d.light’s $300 million receivables facility expansion operates on identical logic to Sun King’s securitization. The company uses customer payment receivables as collateral to secure working capital for inventory. Lenders advance money against future payments from customers buying $200 solar kits on installment plans across multiple African countries.
This is consumer finance infrastructure. The capital enabled d.light to scale, but through financial engineering of existing customer contracts, not through investors backing the company’s vision for exponential growth.
What the Numbers Actually Say
Add up the confirmed non-equity capital from just these five deals:
- Sun King: $156 million (securitization)
- Wave: $137 million (debt)
- SolarAfrica: $98 million (project finance)
- Nawy: $23 million (debt portion)
- d.light: $300 million (receivables facility)
Total: $714 million
That’s nearly a quarter of the reported $3 billion total—and these are just five deals where the capital structure was explicitly disclosed. How many other “funding rounds” in 2025 included undisclosed debt tranches or structured facilities?
If half of 2025’s reported $3 billion involved debt, securitization, or blended finance instruments rather than pure equity, then African tech raised approximately $1.5 billion in actual venture capital—not $3 billion. That’s still growth from 2024, but it’s a fundamentally different story than “venture capital returned to Africa.”
Why This Distinction Matters
Debt and equity serve different purposes and have different requirements. The companies that accessed 2025’s largest debt facilities share common characteristics: millions of paying customers, proven revenue models, and contractual cashflows that lenders can securitize.
Sun King, Wave, and d.light all have millions of customers making regular payments. Their revenue isn’t a projection in a pitch deck—it’s contractual obligations from identifiable people. Lenders will advance capital against that because it’s essentially consumer credit with solar panels or mobile money attached.
Nawy closed 2024 with over $1.4 billion in gross merchandise value and demonstrated profitability despite Egypt’s currency crisis. That track record qualified them for bank debt alongside venture equity.
SolarAfrica’s project had secured power purchase agreements and calculable returns from selling electricity. Lenders financed construction based on proven economics, not growth speculation.
Here’s the problem: If you’re a founder building a pre-revenue startup, a marketplace still burning cash, or a software business without obvious collateral, these debt facilities are irrelevant to you. You cannot securitize receivables you don’t have. Banks won’t lend against future projections. You’re competing for equity capital from the much smaller pool of VCs willing to take actual venture risk.
When media aggregates debt and equity into one “$3 billion” headline and declares the funding winter over, they’re obscuring what capital is actually available to most founders.
The Questions This Raises
Why do we aggregate debt and equity in funding totals? When Safaricom raises debt to expand infrastructure, tech media doesn’t add it to “startup funding” totals. When Equity Bank secures a credit facility, nobody claims it proves venture capital returned. Why the different standard for tech companies?
The answer shapes founder expectations. Entrepreneurs read that competitors raised $150 million and calibrate their own ambitions accordingly—not realizing those headlines describe debt facilities they won’t qualify for unless they’ve already scaled to millions of paying customers.
What’s the real cost of this capital? Debt requires repayment with interest regardless of business performance. Wave’s $137 million comes with interest obligations. Sun King’s securitization means customer payments flow to lenders first. Nawy’s $23 million in bank debt requires regular repayment whether the Egyptian real estate market cooperates or not.
Structured finance can be cheaper than equity dilution, but only if you hit your projections. Miss targets, and you’re servicing expensive debt while trying to raise equity in a down round.
Who’s actually taking risk? In Sun King’s securitization, commercial banks took senior positions—first claim on customer payments—while development finance institutions provided the riskier mezzanine tranches. In Wave’s debt round, Rand Merchant Bank led but DFIs participated with concessional terms.
The pattern repeats: African startups access large capital pools, but the risk gets layered. Commercial entities take minimal exposure while development institutions absorb downside. That’s smart structuring, but it’s not venture capital “returning” to Africa. It’s African companies learning to navigate development finance markets.
What This Means for the Ecosystem
None of this diminishes what companies like Sun King, Wave, Nawy, or d.light have achieved. They’ve built real businesses serving millions of customers and solving critical problems. That they can now access debt markets proves they’ve reached operational scale that justifies non-dilutive capital.
But conflating debt with venture funding distorts the ecosystem narrative. The data shows that while mega-rounds grew in 2025, total deal count remained relatively flat. That means fewer seed and Series A rounds. The early-stage funding layer—where actual venture risk capital matters most—is still constrained.
The uncomfortable truth: African tech funding in 2025 looked more like infrastructure finance than venture capital. Development finance institutions remained crucial players in nearly every major deal. Debt, securitization, and blended finance drove headline numbers more than pure equity rounds.
That’s not necessarily wrong. Debt can be cheaper than equity for the right companies. Securitization unlocks working capital for businesses with proven cashflows. Project finance enables infrastructure development that pure venture capital won’t touch.
But when publications report “$3 billion in startup funding,” they’re aggregating venture equity betting on exponential growth, bank debt requiring repayment with interest, securitized customer receivables, project finance for specific infrastructure assets, and blended structures with DFI participation. These are different capital sources with different availability, different risk profiles, and different implications for ecosystem health.
African tech in 2025 didn’t experience a venture capital comeback. It experienced a structured finance breakthrough—companies that reached scale now qualify for debt and securitization facilities that were previously inaccessible.
That’s meaningful progress. But it’s progress for companies that already made it, not for the thousands of early-stage startups still trying to raise their first venture rounds. Until we see consistent $100 million pure equity rounds from commercial VCs—no DFI participation, no debt tranches, no securitized receivables—African tech’s capital environment remains fundamentally different from the narrative that “$3 billion proves the funding winter is over.”
The winter isn’t over for most founders. It just ended for the handful of companies that no longer need venture capital because they qualified for something different: structured finance secured against proven cashflows.
