Debt now accounts for a record 41% of all capital raised by African tech startups, up from just 17% in 2019, according to Partech Africa’s annual venture capital report.
Nigerian founders are part of that shift, though from a smaller base than regional leaders Kenya and Egypt.
Three founders with direct experience of the funding market have now told Nairametrics why that shift is happening, from three different angles.
Businesses are reaching a level of revenue predictability that lenders can finally underwrite. Equity has become harder, slower and more demanding to raise. And new local channels are now letting capital reach borrowers that could not access it a few years ago.
Babatunde Akin-Moses, founder of the digital lender Sycamore, has just lived through a debt raise, and says the shift reflects businesses finally reaching the discipline institutional lenders require.
That scrutiny, he said, was central to Sycamore’s own commercial paper issuance.
He is also careful to add a warning of his own.
Temitope Ekundayo, co-founder of the Lagos-based private capital platform GetEquity, argues the more important story is not debt replacing equity at all, but equity itself changing shape.
What has stepped in for earlier-stage companies, in his account, is often still called equity but behaves like debt.
Ekundayo also pushes back on the idea that debt itself is a fallback option.
That same structure, he argues, is exactly what makes debt wrong for a company that has not yet found its footing.
Oluwaseyi Ayodeji, an AI infrastructure programme leader and founder of Regal Stack, agrees that maturity is the real driver behind the continental shift, but is not convinced the evidence yet justifies applying that conclusion to Nigeria specifically.
His caution about Nigeria is direct.
And Ekundayo points to a structural change underneath all three arguments that he says gets asked about least: who is actually willing to lend, and where that capital originates.
Partech’s longer-term figures show debt’s share of African tech funding climbing from 17% in 2019 to 24% in 2022 and 35% in 2023, dipping to 31% in 2024, then jumping to 41% in 2025 as debt volume surged 63% year on year to $1.64 billion.
Total African tech funding reached $4.1 billion in 2025, and Partech Africa General Partner Tidjane Dème described the rise of debt as the year’s most structural shift.
Western Africa, the region that includes Nigeria, accounted for just $5.9 million of July’s total, the smallest share of any region that month.
Inside the 2025 continental figures, Nigeria’s picture is sharper still. Kenya led African debt financing that year with $498 million, Egypt followed with $246 million, and Nigeria came in third with $160 million, up 132% year on year but still only 19% of the country’s total funding.
Nigeria’s equity funding, meanwhile, actually fell 21% that same year, the only one of Africa’s four largest markets where equity declined in 2025.
But Moove’s debt is underwritten against a global, largely dollar-denominated revenue base spanning multiple markets, not Nigerian naira earnings specifically. This is precisely the exposure Ayodeji says Nigeria’s own currency history should make lenders and founders think harder about before assuming the same confidence applies at home.
Debt is rising quickly in Nigerian startup financing, but from a small base, and mostly among companies mature enough to prove predictable revenue to a lender.
For most founders, especially earlier-stage ones, the bigger change is that both equity and debt have become harder, more conditional, and more tightly tied to proven revenue than they were a few years ago.
As Ekundayo put it, the market is sorting itself by maturity, debt for the companies that can prove predictable revenue, equity that increasingly carries some of the demands of debt for those still trying to get there.
