After two years of decline, Africa’s technology funding will exceed $3 billion in 2025, an increase of 36% from $2.2 billion in 2024. Publications across the continent celebrated the “remarkable comeback” and cited mega-rounds of more than $50 million as proof of the return of investor confidence.
But a quick look at the list of the top 10 biggest fundraisers of 2025 reveals something unusual. At least five of these headline-grabbing “funding rounds” weren’t equity investments at all. They are debt facilities, securitization, and debt financing, which are financial products that operate on a fundamentally different logic than venture capital.
The distinction is important. When venture capital flows into a startup, investors are betting on exponential growth and accepting the risk of total loss for the chance of a 10x return. When lenders offer debt or structured finance, they are extending capital against proven assets and expecting predictable repayments. One is the risk capital available to early-stage companies. The other is only available to companies that are already scaling.
Trading that changed mathematics
Sun King’s $156 million topped many “largest round” lists in July. The Kenya-based off-grid solar company has made headlines for being the first securitization of its kind in sub-Saharan Africa outside South Africa to be backed by a majority commercial bank.
However, securitization is not equity financing. Sun King packages receivables from its 1.4 million customers who purchase solar power systems on installment plans and sells those future cash flows to lenders. ABSA, Citi, Kenya Co-operative Bank, KCB and Stanbic provided the senior tranche, while development finance institutions British International Investment, FMO and Norfund provided mezzanine financing. Lenders advance capital now and collect it as customers make payments over time.
This is structured finance that uses proven cash flow as collateral. If this involved venture risk, the five African commercial banks would not have participated. They’re not betting on Sun King’s growth potential; they’re essentially buying bonds backed by contractual obligations with customers.
Wave’s $137 million raise in June followed a similar pattern. The Senegalese mobile money unicorn, which serves 29 million monthly users across eight markets in West Africa, has secured debt financing led by Rand Merchant Bank, with participation from development finance institutions including British International Investment, Finfund and Norfund.
Debt financing means Wave has to pay back the money it borrows with interest. There is no dilution of stock. No new investor is betting on a 10x return. This is corporate borrowing, the kind used by existing companies for working capital, not venture capital. The only difference? Tech media covered this as a “mega-round.”
SolarAfrica’s $98 million was explicitly named project financing for the SunCentral solar installation, the first 144 MW of a planned 1 GW solar power project in South Africa. Project finance is infrastructure debt secured by specific assets. The lender analyzed the solar facility’s projected production, secured a power purchase agreement, calculated returns over 20 years, and extended capital against predictable cash flows.
It doesn’t fund the growth of tech startups. This funds the construction of an asset with known income potential.
Nawy’s $75 million was hailed as one of the largest Series A rounds ever recorded for an African startup. Egypt’s Proptech Nawi combined $52 million in equity from Partech Africa with $23 million in debt from a major Egyptian bank.
That $23 million debt portion is not venture capital, but a bank loan that Nawy must repay with interest. Egyptian banks evaluated Nawi’s earnings (more than $1.4 billion in circulation by the end of 2024), confirmed its profitability, and extended the loan facility. When the media reported on Mr. Nawi’s “$75 million raise,” they condensed two fundamentally different sources of funding into one headline number.
d.light’s $300 million debt facility expansion works on the same logic as Sun King’s securitization. The company secures working capital for inventory by using customer receivables as collateral. The lender advances funds against future payments from customers who purchase $200 solar kits on installment plans in multiple African countries.
This is the infrastructure of consumer finance. This capital allowed d.light to scale, but not through investors supporting the company’s vision for exponential growth, but through financial engineering of existing customer contracts.
What the numbers really say
Add up the confirmed non-equity capital from these five transactions.
Sun King: $156 million (securitization) Wave: $137 million (debt) SolarAfrica: $98 million (project finance) Nawy: $23 million (debt portion) d.light: $300 million (credit facility)
Total amount: $714 million
This represents nearly a quarter of the total reported $3 billion, and these are the only five transactions in which the capital structure was explicitly disclosed. How many other 2025 “financing rounds” included undisclosed debt tranches or structured facilities?
If half of the $3 billion reported in 2025 involved debt, securitization, or mixed financial instruments rather than pure equity, African technology companies would have raised about $1.5 billion in actual venture capital, not $3 billion. This is still growing even from 2024, but it is fundamentally different from the story of “venture capital returning to Africa.”
Why this distinction is important
Debt and equity serve different purposes and have different requirements. Companies that have accessed the largest debt facilities in 2025 have in common: millions of paying customers, proven revenue models, and contractual cash flows that lenders can securitize.
Sun King, Wave, and d.light all have millions of regularly paying customers. Their revenue is not pitch deck projections, but contractual obligations from identifiable people. It’s essentially consumer credit with solar panels and mobile money attached, so lenders will advance capital against it.
Nawi ended 2024 with a gross merchandise value of over $1.4 billion, demonstrating profitability despite the Egyptian currency crisis. That track record made them eligible for bank loans along with equity in the venture.
SolarAfrica’s projects had entered into power purchase agreements and secured a calculable profit from the sale of electricity. Lenders funded construction based on proven economics rather than growth speculation.
Here’s the problem. If you are a founder building a startup with no revenue, a market that is still burning cash, or a software business with no obvious collateral, these debt facilities are irrelevant to you. You cannot securitize receivables that you do not own. Banks do not lend against predictions of the future. You will be competing for capital from a much smaller number of VCs who are willing to take on the actual venture risk.
By lumping debt and equity into headlines like “$3 billion” and declaring the fundraising winter over, the media obscures what kind of capital is actually available to most founders.
Questions raised by this
Why do we add debt and equity together in the total funding? Even though Safaricom raises debt to expand its infrastructure, the tech media doesn’t add it to the total ‘start-up capital’. No one claims that when Equity Bank secures a line of credit, it proves venture capital has been returned. Why are standards different for different technology companies?
The answer shapes the founder’s expectations. Entrepreneurs read that a competitor was raising $150 million and adjusting their ambitions accordingly, but they didn’t know those headlines were describing a debt facility they could only qualify for by scaling to their already millions of paying customers.
What is the actual cost of this capital? Debt must be repaid with interest regardless of performance. Wave’s $137 million comes with interest obligations. Sun King’s securitization means that customer payments flow first to lenders. Mr. Nawi’s $23 million bank debt will need to be repaid regularly, whether Egypt’s real estate market cooperates or not.
Structured finance can be cheaper than equity dilution, but only if you achieve your plan. If they don’t meet their targets, they will have to pay down high debt while trying to raise equity through a down round.
Who is really taking the risk? In Sun King’s securitization, commercial banks held the senior position of first claim on customer payments, while development financial institutions provided the riskier mezzanine tranche. Wave’s debt round was led by Rand Merchant Bank, but DFIs also participated on concessional terms.
This pattern repeats. African startups have access to large pools of capital, but the risks are layered. Commercial entities receive minimal exposure, while development institutions absorb the downside. While this is a smart structuring, it does not mean that venture capital is “coming back” to Africa. That’s because African businesses are learning how to navigate the development finance market.
What this means for the ecosystem
None of this diminishes the accomplishments of companies like Sun King, Wave, Nawy, and d.light. They’ve built real businesses serving millions of customers and solving critical problems. Their access to the bond market proves that they have reached a scale of operation that justifies non-dilutive capital.
But conflating debt and venture funding distorts the ecosystem story. Data shows that while mega-rounds increased in 2025, the total number of deals remained relatively flat. That means fewer seed rounds and fewer Series A rounds. Early-stage funding, where actual venture risk capital is most important, remains constrained.
The uncomfortable truth: Technology financing in Africa in 2025 looked more like infrastructure finance than venture capital. Development finance institutions continued to play an important role in almost all major transactions. Debt, securitization and blended finance drove headline numbers more than pure equity rounds.
That’s not necessarily wrong. For the right company, debt can be cheaper than equity. Securitization frees up working capital for companies with proven cash flows. Project finance enables infrastructure development that pure venture capital does not touch.
But when a publication reports “$3 billion in start-up capital,” it aggregates a mix of venture equity bets on exponential growth, bank debt that must be repaid with interest, securitized customer receivables, project finance for specific infrastructure assets, and DFI participation. These are different sources of capital, with different availability, risk profiles, and impacts on ecosystem health.
The African technology industry in 2025 had not experienced a resurgence in venture capital. We experienced a breakthrough in structured finance. As companies scale up, they can now take advantage of debt and securitization facilities that were previously inaccessible.
That’s meaningful progress. But this is an advance for already successful companies, not for the thousands of early-stage startups still trying to raise their first venture round. Until we continue to see $100 million pure equity rounds from commercial VCs, with no DFI participation, no debt tranches, and no debt securitizations, the capital landscape for the African tech industry will remain fundamentally different from the “$3 billion proves the funding winter is over” narrative.
For most founders, winter isn’t over yet. It was just over for a few companies that no longer needed venture capital because it had another qualification: structured finance secured on the basis of proven cash flow.
