African Development Bank Commits $100M to Tech Startups

When funding for African tech startups plummeted to its lowest level in four years, one of Africa's largest development banks decided it was time to step in.

Africa Finance Corporation, a development bank with over $19 billion in assets, just committed $100 million to support venture capital firms investing in African tech startups. The first $40 million is already heading to Future Africa and Lightrock Africa, two firms backing innovative companies across the continent.

The timing couldn't be better. African venture capital firms raised just $107 million in 2025, an 87% drop from the previous year, as European investors pulled back dramatically from the continent.

AFC has traditionally focused on infrastructure like ports and subsea cables, but this marks a bold new direction. The bank is now backing the next generation of African tech companies, from pre-seed startups to growing businesses.

"Our first two commitments are $25 million to LightRock and $15 million to Future Africa," said Begna Gebreyes, AFC's head of heavy industries, telecoms, and technology. Another $60 million will support additional fund managers currently being evaluated.

The Ripple Effect

AFC's commitment represents more than just money flowing into African tech. The bank plans to use this initial investment as a foundation to attract $300 to $500 million in additional funding from US and European foundations, endowments, and pension funds.

These international investors have wanted exposure to African tech but lacked the local expertise to evaluate individual fund managers. By partnering with AFC, they get a trusted anchor institution with deep continental knowledge.

This approach addresses a critical gap. While African startups raised $3.4 billion in 2025, support from development finance institutions dropped to just 27% of total commitments, down from historically higher levels.

The strategy is particularly important as European venture investors, once the largest source of capital for African funds, collapsed from 70% of commitments between 2022 and 2024 to just 21% in 2025. AFC's participation signals that African institutions are willing to support their own tech ecosystem when international capital grows cautious.

For the venture capital firms receiving the funding, this creates a win-win scenario. They gain significant capital for their portfolios while AFC builds a pipeline of promising companies for future direct investment.

If AFC's plan succeeds in attracting the additional $300 million from international partners, the total $400 million capital pool could reshape African tech funding at exactly the moment founders need support most.