Africa’s private capital market stabilises at $5.1b
Despite a challenging global environment, Africa outperformed global private capital trends, recording 530 private capital deals in 2025, up eight per cent Year-on-Year (YoY), making it the only region globally
- By Chikodi Okereocha
Despite a challenging global environment, Africa outperformed global private capital trends, recording 530 private capital deals in 2025, up eight per cent Year-on-Year (YoY), making it the only region globally to record growth in deal activity.
The African Private Capital Association (AVCA) made this known in its ‘2025 Private Capital Activity in Africa’ report released yesterday, which revealed that $5.1 billion was invested across 530 deals.
This, according to the report, made Africa the only global region to record deal volume growth in 2025 (+8per cent), while global deal volumes fell by seven per cent.
The year also marked one of Africa’s strongest exit cycles on record, signaling improving liquidity pathways and a steadily maturing investment ecosystem, even as fundraising moderated in line with global headwinds.
Africa recorded 81 exits in 2025, up 27per cent YoY, marking the second highest exit volume on record. This momentum stood in contrast to global markets, where exit activity declined by 15 per cent over the same period.
The report stated that the exit landscape continued to evolve, with trade buyers remaining the primary route, accounting for 38 per cent of all exits, while sponsor-to-sponsor transactions reached a record 26 per cent, reflecting growing secondary market depth.
It added that local investors accounted for 68 per cent of exits, signaling deepening domestic capital markets, even as Initial Public Offer (IPO) activity also improved modestly, with four listings recorded during the year.
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Domestic capital was a key source of liquidity, representing 68 per cent of private capital acquisitions. International buyers accounted for the remaining 32 per cent, led by Asian strategic acquirers seeking to expand or deepen their presence in African markets.
However, fundraising moderated in 2025 as liquidity pressures persisted globally. A total of $2.7 billion was raised during the year, reflecting a 34 per cent YoY decline in line with broader market headwinds.
Development finance institutions continued to anchor the market, accounting for 64 per cent of all commitments.
African institutional investors contributed 21 per cent of total commitments, led by sovereign wealth funds and pension funds whose allocations to private capital have expanded steadily in recent years.
This growing participation, the report said, highlights a structural shift toward locally sourced capital, even as overall fundraising conditions remained challenging
Investment activity in Africa, the report said, remained resilient in 2025, with deal volumes rising for the third consecutive year.
Although the total deal value edged slightly lower to $5.1 billion, the report said fund managers continued to deploy capital, shifting towards smaller midmarket opportunities as they adjusted to tighter global conditions.
Deals in the $50–99 million range doubled as managers scaled back from capital-intensive transactions and focused on more targeted investments.
Also, private debt gained momentum, with deal volume rising 57 per cent YoY supported by greater use of venture debt. The asset class is now firmly established alongside Private Equity and Venture Capital as a key source of financing on the continent.
The report further noted that financials continued to drive activity, reflecting ongoing demand for Financial Technology (Fintech) which accounted for 82 per cent of all transactions in the sector.
The information sector was the second most active sector with investments targeting the finance, healthcare, retail and logistics sectors.
The AVCA also revealed in its report that Southern Africa remained the most active region, while East Africa and North Africa were strong performers, supported respectively by the growth in energy and information technology investments.
Commenting on the report, Chief Executive Officer, AVCA, Abi Mustapha-Maduakor, said: “This year’s report tells a clear story: Africa is decoupling from the global slowdown.
“Stronger exit performance, deeper participation from domestic institutional capital, and sustained commitments from development finance institutions all point to a maturing ecosystem.
“We expect this momentum to build further as capital providers increase their exposure to sectors driving Africa’s next phase of economic transformation.”
AVCA is the nexus of private capital in Africa, championing and enabling private capital investment in Africa.
As the pan-African industry body, AVCA acts as the trusted independent source of information, insight, and intelligence, inspiring investor confidence and making the case for both commercial returns and the impact of private capital in Africa.
AVCA represents a community of capital allocators, investors, fund managers, advisors, entrepreneurs, and professional services committed to the shared vision of a prosperous Africa that is sustainable, inclusive, and innovative.
