AFC to reduce African startups’ dependence on foreign investors with $100m investment

The Africa Finance Corporation (AFC) has announced an investment of $100 million in Africa-focused technology funds. The corporation disclosed this in a statement.

According to the statement, the corporation is looking to increase local institutional participation in Africa’s venture funding ecosystem while reducing the dependence of African startups on foreign venture capital companies with the fund.

Speaking about the investment, President and CEO Samaila Zubairu said the fund will help accelerate rapid technology adoption and satisfy the growing demand of the youthful population.

“AFC’s US$100 million Africa-focused Technology Fund will accelerate the convergence of growing demand, rapid technology adoption, youthful demographics and the enabling infrastructure we are building,” he said.

According to him, digital infrastructure is now as fundamental to Africa’s transformation as roads, rail, ports and power — enabling productivity, payments, logistics, services, data and cross-border trade, while creating jobs and industrial scale.

AFC’s investment amid increased participation by African institutional investors

This development is coming amid impressive participation by African institutional investors in the African venture funding space. According to a Technext analysis, 59 of 162 investors that participated in African startup venture funding between January and April 2026 are indigenous, a 36 per cent share.

See also: Africa saw a surge of indigenous investors between January & April 2026

While this is by far the highest share of investors compared to other regions like Europe, Asia and America, it nonetheless means 64 per cent of the investors are foreign. Moreover, while Africa may have the largest concentration of investors, they are mostly responsible for smaller investments, leaving the larger deals to the foreign investors.

The AFC agrees, noting that local institutional investors remain largely absent from many venture capital fund structures, with international investors still dominating the market. Its new investment is therefore designed to address the persistent shortage of long-term institutional funding that continues to limit the growth and scaling of African technology companies.

Describing it as “catalytic capital”, the fund will go to leading Africa-focused technology funds, with particular emphasis on African-owned fund managers. This, the corporation believes, will deepen local ownership within the venture capital ecosystem and reduce dependence on foreign investors.

The corporation further assured that the investment will be deployed across the full innovation lifecycle, from early-stage funding to growth-stage technology scaling. It also noted that the current financing represents the first tranche of a broader investment pipeline, with additional Africa-focused fund commitments expected in the near future.

As part of the first phase of deployment, the AFC said it has already made commitments to Lightrock Africa Fund II and Future Africa Fund III.

Speaking about the investment, Managing Partner and CEO of Lightrock, Pal Erik Sjatil, said the investment is a reinforcement of an existing partnership focused on backing high-growth technology-enabled businesses across Africa. He said the collaboration reflects a shared conviction in supporting scalable companies with strong fundamentals, proven business models and clear profitability pathways.

On his part, Founding Partner of Future Africa, Iyin Aboyeji, said the investment signals growing recognition of digital infrastructure as a key pillar of Africa’s economic transformation. He further noted that the AFC, being the fund’s first multilateral development bank partner, could encourage more development finance institutions, pension funds, insurers and other institutional investors to increase their exposure to Africa’s technology ecosystem.