African startup funding may have crossed the US$174 million mark in January, but the distribution of that capital tells a far more restrained story about where investor confidence now lies. As venture funding slows across the continent, Egypt and Nigeria once again emerged as the main magnets for capital, even as the number of startups able to raise money shrank sharply.

Data from Africa: The Big Deal shows that Africa startup raised US$174 million through disclosed deals of US$100,000 and above during the month, a steep drop from the US$276 million recorded in January 2025 and well below the recent monthly average of US$263 million. While funding levels remain higher than what was recorded in January 2023 and January 2024, the pace of deals suggests investors are pulling back rather than spreading capital widely.

Only 26 startups announced qualifying funding rounds in January, just over half of the typical monthly count seen over the past year. Analysts say this thinning pipeline is more telling than the headline figure, pointing to January 2026 as the weakest month for deal activity since at least 2020. The message from investors is increasingly clear: fewer companies, larger cheques, and far less tolerance for risk.

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A handful of large transactions carried the month. Egypt-based fintech valU led the pack after securing US$64 million in debt financing from the National Bank, while Nigeria’s mobility financing startup MAX raised US$24 million through a mix of equity and asset-backed debt. According to Africa: The Big Deal, the prominence of these deals reflects growing investor preference for asset-backed and cash-generating business models in a tougher funding climate.

Beyond the two biggest rounds, only a small number of startups managed to cross the US$10 million mark. Egyptian fintech NowPay raised US$20 million, Moroccan proptech startup Yakeey closed a US$15 million Series A, Terra Industries secured US$12 million in the defence sector, and Côte d’Ivoire-based fintech Cauridor joined the list of notable raises.

The month also delivered clear signals of consolidation. Flutterwave’s acquisition of Nigerian open banking startup Mono in an all-stock deal valued at about US$30 million highlighted continued reshaping within fintech. Savannah’s acquisition by Commit and Izili Group’s purchase of off-grid solar company Qotto further underscored how stronger players are repositioning for scale as fundraising becomes more difficult.

Taken together, the January numbers suggest that Africa startup ecosystem is entering a more selective phase. Capital is still available, but it is increasingly concentrated among later-stage companies with strong balance sheets, proven unit economics and clearer paths to profitability. For early-stage founders, especially those outside the continent’s biggest markets, the funding environment is becoming far less forgiving.

Meiza Nigeria