AFC commits $40M to African tech VCs amid funding decline
Africa Finance Corporation committed $40 million to Future Africa and Lightrock Africa as part of a $100 million fund targeting African tech venture capital managers. AFC allocated $25 million to LightRock and $15 million to Future Africa, with $60 million remaining for additional fund managers currently being vetted. This marks a significant shift from AFC's traditional infrastructure investment focus to early-stage tech.
The timing couldn't be more critical as African tech venture capital funding fell 87% year-on-year in 2025, with African startups raising just $3.4 billion total. European investors dramatically reduced their commitments from 70% to just 21% of African tech funding, creating a major capital gap that threatens the continent's tech ecosystem.
This AFC commitment could trigger a fresh wave of institutional investment by serving as an 'anchor' that brings in $300-500 million in co-investment from US and European foundations, endowments, and pension funds. For local tech entrepreneurs and VCs, this represents potential rescue funding during a critical downturn—will this AFC initiative reverse the capital flight or prove too little too late?