The African Private Capital Association released its 2025 Private Capital Activity in Africa report, revealing that Africa outperformed global private capital trends despite a challenging global environment.
The year also marked one of Africa’s strongest exit cycles on record, signalling improving liquidity pathways and a steadily maturing investment ecosystem, even as fundraising moderated in line with global headwinds.
Key insights:
- US$5.1bn was invested across 530 deals, making Africa the only global region to record deal volume growth in 2025 (+8%), while global deal volumes fell by 7%
- Africa recorded 81 exits in 2025, up 27% YoY, marking the second highest exit volume on record.
- Fundraising fell 34% YoY to US$2.7bn as liquidity pressures caught up with fund managers.
Deal Activity Rises and Sets a Higher Baseline
Investment activity in Africa remained resilient in 2025, with deal volumes rising for the third consecutive year.
Although the total deal value edged slightly lower to US$5.1bn, fund managers continued to deploy capital, shifting towards smaller midmarket opportunities as they adjusted to tighter global conditions.
Deals in the US$50–99mn range doubled as managers scaled back from capital-intensive transactions and focused on more targeted investments.
Private Debt gained momentum, with deal volume rising 57% 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.
Financials continued to drive activity, reflecting ongoing demand for Fintech which accounted for 82% 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.
Southern 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.
Africa’s Exit Market Strengthens Amid Global Decline
Africa’s exit market strengthened in 2025 as fund managers prioritised liquidity. Exit volumes rose 27% YoY to 81 transactions, the second highest- level on record, lifting the exit to- -investment ratio to 0.2x (double the level seen in 2024). This momentum stood in contrast to global markets, where exit activity declined by 15% over the same period.
The exit landscape continued to evolve. Trade buyers remained the primary route, accounting for 38% of all exits, while sponsor-to-sponsor transactions reached a record 26%, reflecting growing secondary market depth. IPO activity also improved modestly, with four listings recorded during the year.
Domestic capital was a key source of liquidity, representing 68% of private capital acquisitions. International buyers accounted for the remaining 32%, led by Asian strategic acquirers seeking to expand or deepen their presence in African markets.
Fundraising Slows Amid Liquidity Pressures While Domestic Capital Deepens
Fundraising moderated in 2025 as liquidity pressures persisted globally. A total of US$2.7bn was raised during the year, reflecting a 34% YoY decline in line with broader market headwinds. Development finance institutions continued to anchor the market, accounting for 64% of all commitments.
Domestic capital continued to deepen. African institutional investors contributed 21% 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 highlights a structural shift toward locally sourced capital, even as overall fundraising conditions remained challenging.
Abi Mustapha-Maduakor, chief executive officer, AVCA, 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.”
