The event, now in its second year, was attended by over 300 investors, lenders, mentors and ecosystem stakeholders to engage with founders building and expanding businesses across different sectors.

Pitch Day is the final stage of Cascador’s annual Catalytic Fund programme, through which the organisation provides financing and support to founders who have completed its ScaleUp programme.

Funding is offered through a mix of debt and equity investments, with recipients selected based on business performance, growth potential and expected social impact.

The largest funding allocation went to Agriarche, led by Deina Mayaki, which secured a ₦2.5 billion debt facility. Koolboks, founded by Deborah Gael, received ₦2 billion, while Powerstove, led by Okey Esse, secured ₦1.8 billion.

Other debt recipients included First Electric, which received ₦500 million, and Fortics, which secured ₦200 million. Two companies received equity investments, with Stears obtaining $450,000 and Indigenius AI receiving $250,000.

Speaking after receiving the funding, Mayaki said the support would help boost Agriarche’s expansion plans.

“Cascador’s ScaleUp program built upon my team’s ability to translate learning into action by helping us refine our message and market position, adjust our funding strategy, and adapt without defensiveness. 

“The Catalytic Fund due diligence team assessed Agriarche’s financial strength, resourcefulness, and track record of success, and they rewarded our high-potential for scale and impact today by awarding a new N2.5 billion credit facility to power our growth.”

Cascador founder Dave DeLucia said the programme has now distributed over $9 million to entrepreneurs since Pitch Day was introduced two years ago.

“In just two years, Pitch Day has awarded more than $9 million to growth-stage African founders, helping to build a new generation of entrepreneurs equipped to scale transformative businesses.

“We’re now looking for the next cohort of exceptional founders to join our 2026 ScaleUp program and hope to see them on stage at the next Pitch Day.”

Beyond the investment awards, organisers also recognised outstanding participants. Indigenius AI received the NSIA Prize for Innovation, which came with a $10,000 award, while Koolboks won the judges’ Best Pitch prize and received an additional $10,000.

The event also featured a panel discussion on financing options for growth-stage businesses in Nigeria. Participants included Idris Bello of LoftyInc Capital, Danladi Verheijen of Verod Capital, Darlington Nwankwo of Sterling Bank, Ada Osakwe of Agrolay Ventures and Nuli, and Ijeoma Taylaur of NSIA.

The session examined how businesses can access equity financing, working capital, concessionary debt and other forms of long-term support.

Daniel Ayoade of Verod Capital Management, who served as one of the judges, alongside Iyin Aboyeji of Future Africa and Nneka Eze of Vested World, said his involvement with the programme had shown the importance of preparing founders before funding is provided.

“Two years judging Pitch Day, plus a season as faculty for the Cascador ScaleUp program, taught me something the term sheets never capture: capital readiness, not capital, is what turns funding into scale. 

“The founders on stage today walk away with customer pipelines, team training, mentorship, and bespoke support, the connective tissue that lets them multiply what they raise. This is not an accelerator. It is ecosystem architecture, and these founders are its proof.”

Two previous beneficiaries of the Catalytic Fund also shared updates on their businesses.

Babatunde Akin-Moses, founder of Sycamore, said the support received from Cascador helped strengthen the company ahead of a recent fundraising exercise.

“Truly catalytic capital should create companies that eventually no longer need it: That is what it did for Sycamore. Our recent commercial paper raise was oversubscribed by 230%.”

Drive45 founder Seyi Adefemi said access to both funding and strategic support helped the company move beyond a critical growth stage.

“There are founders across Africa solving real problems and building resilient businesses. What they often lack is the financial and non-financial support to cross the gap between potential and scale. Cascador helped Drive45 cross that gap.”

Since launching in 2019, Cascador says it has supported 70 companies that have collectively raised more than $125 million.

Applications for the next ScaleUp programme are open until June 15 for founders across sub-Saharan Africa seeking funding, mentorship and business support.

The post Cascador Awards Over $5 Million to Seven African Entrepreneurs at 2026 Pitch Day appeared first on Tech | Business | Economy.

Under the Finance Bill 2026 before parliament, the government wants to introduce a 15% capital gains tax on gains made by non-resident investors selling shares abroad when those shares derive value from Kenyan assets or operations.

If passed, the amendment to Kenya’s Income Tax Act would allow the Kenya Revenue Authority (KRA) to tax transactions completed outside the country, even when the companies involved are registered in foreign jurisdictions such as Mauritius, Delaware, London or the Cayman Islands.

The proposal targets a long-standing structure used by venture capital and private equity firms investing in African startups. Many Kenyan startups operate locally but are incorporated abroad because foreign investors prefer offshore holding companies that simplify fundraising, offer stronger legal protection and make acquisitions easier.

Kenya now wants a share of the profits when those investors exit.

The bill states that gains arising from “the alienation of shares by a non-resident person where the shares derive their value from Kenya” would become taxable locally, regardless of where the transaction happens.

Treasury officials are also seeking powers to tax deals involving “a change of the group membership of a company resident in Kenya” as well as changes in ownership tied to Kenyan property.

The proposed law could impact investor exits in sectors including technology, energy and infrastructure, where offshore ownership structures are common.

For founders and investors in Kenya’s startup ecosystem, the changes may create fresh tax exposure during acquisitions, secondary sales and restructuring exercises carried out at the holding-company level.

The Institute of Certified Public Accountants of Kenya (ICPAK) warned lawmakers that the amendment may go beyond standard asset sales.

“As drafted, the provision may create Kenyan CGT exposure for offshore investor exits, capital raising transactions, group restructurings and internal reorganisations undertaken at holding company level,” the body said.

Kenya’s move follows a string of high-profile disputes over offshore transactions linked to local assets.

Last year, Tullow Oil agreed to sell its Kenyan subsidiary, Tullow Kenya BV, to Gulf Energy in a deal connected to the Lokichar oil project in Turkana. Although the transaction was structured offshore, the KRA issued a KES 21 billion ($161.7 million) tax demand, arguing that the transferred shares drew their value from Kenyan oil resources.

The tax authority took a similar position in the 2017 sale of Java House by Emerging Capital Partners to Dubai-based Abraaj Group. Kenya’s Tax Appeals Tribunal later upheld a KES 773.8 million ($5.9 million) tax assessment after rejecting arguments that the transaction fell outside Kenya’s jurisdiction.

The Finance Bill 2026 also includes other tax measures. Kenya plans to raise rental income tax from 7.5% to 10%, introduce a 20% tax on gambling winnings and impose a 1.5% withholding tax on scrap metal sales.

Most provisions in the bill are expected to take effect from July 1, 2026, if parliament approves them.

Kenya is not alone in strengthening tax rules around offshore deals. Uganda already taxes some offshore transactions linked to local assets, while governments across emerging markets are increasing pressure on multinational investors to pay taxes where economic value is created.

For foreign investors already dealing with a slow funding market across Africa, the proposed tax could complicate and increase the cost of Kenyan startup exits.

The post Kenya Proposes 15% Tax on Offshore Sales of Local Companies appeared first on Tech | Business | Economy.

Headquartered in Lagos, the company works with banks, fintechs and other lenders to acquire and manage non-performing retail and SME loans. 

The latest round drew support from several African private equity and venture capital firms, including AfricInvest through its Financial Inclusion Vehicle fund, as well as Algebra Ventures, which made its first investment in a Nigeria-headquartered business through the deal.

Existing investors, including Capria Ventures, VestedWorld, Axian CVC, Angaza Capital, 4Di Capital and DotExe Ventures, also returned for the round.

BFREE said the new investment will help it pursue larger acquisitions of bad debt portfolios while strengthening long-term agreements with financial institutions that regularly offload non-performing accounts.

Having raised $3 million in funding in 2024, the company started as a technology-driven debt collection business before shifting into direct acquisitions of distressed unsecured loans, ranging from nano credit to SME facilities. 

Since launch, BFREE has completed more than 35 transactions and now manages over 11 million borrower accounts across several African countries.

Chief Executive Officer Julian Flosbach said the company now plans to operate at a larger scale.

“The market opportunity is significantly larger than the infrastructure historically available to address it. This round puts us in a position to pursue substantially larger portfolio acquisitions, engage a broader range of institutional partners, and do so with the speed and certainty of execution that serious counterparties demand,” he said.

Rather than handling one-off recoveries, BFREE works through forward flow arrangements. Under those deals, lenders agree to sell newly non-performing loans to the company on a recurring basis.

BFREE said its collection model avoids intimidation and public shaming, practices that have long attracted objection in parts of Africa’s digital lending sector. Instead, it focuses on repayment structures that borrowers can realistically manage.

Patrick Herrmann, partner at AfricInvest, said the company is filling an important gap in Africa’s fast-growing digital credit market.

“BFREE’s approach to credit management, based on a unique set of proprietary data and a technology-enabled collection platform, closes an essential gap in the digital lending value chain. 

“High-velocity digital lending has become a core product across markets, with financial institutions, banks and fintechs alike requiring effective ways to manage small-ticket non-performing loans. 

“BFREE’s execution-driven team has brought the platform to an inflexion point, which will enable them to purchase larger portfolios and become a prime partner for banks and fintechs across African markets,” he said.

For Omar Khashaba, general partner at Algebra Ventures, the investment shows encouraging interest in Africa’s distressed debt market, where lenders still struggle to resolve billions of dollars in unpaid retail and SME loans every year.

“Billions of dollars in African retail and SME credit go unresolved every year because the institutional infrastructure to clear them simply does not exist. Healthy credit markets need a disciplined buyer for distressed debt. 

“The founders Julian, Moses and Chukwudi have built a platform that combines rigorous portfolio pricing, risk management, and deep data infrastructure to clear distressed retail and SME debt at scale. We are backing BFREE together with AfricInvest to scale them across Africa and beyond,” he said.

BFREE did not disclose the size of the investment round. However, the company said the capital will support expansion in both existing and new African markets where demand for distressed debt solutions continues to grow.

The post Credit Management Startup BFREE Eyes Pan-African Expansion with New Investment Round appeared first on Tech | Business | Economy.

People familiar with the talks say investors have already made early offers in the range of $850 billion to $900 billion but the company has not accepted any of them.

Discussions are still at an early stage, and nothing has been agreed.

Several investors are trying to secure large stakes, with some offers said to be worth up to $50 billion in new capital. A decision is expected at a board meeting in May.

Anthropic last raised funds in February and that round brought in $30 billion, valuing the company at $380 billion. If this new round goes through at the higher valuation being discussed, it would mark a surge in a matter of months.

The move would also change its position in the market as OpenAI was valued at about $852 billion in March after a major funding round, but a deal at $900 billion would place Anthropic ahead as the most valuable artificial intelligence startup.

The company has received backing from major technology firms. Google has committed billions of dollars, with more funding tied to performance targets. Amazon has also invested heavily and plans to increase its stake over time.

Anthropic declined to comment when contacted.

Revenue growth has supported the surge in investor interest with the company’s annual revenue run rate passing $30 billion earlier this year and is now said to be approaching $40 billion.

Growth has come from demand for its Claude models, especially tools built for coding and business use.

Recent releases include new versions of its core systems and a cybersecurity-focused model with limited access due to safety issues.

There is also a public listing under consideration. Bloomberg reported that an initial public offering could come as soon as October. If that plan holds, this funding round may be the last before the company goes public.

The post Anthropic Considers Funding Round That Could Value Firm Above $900bn appeared first on Tech | Business | Economy.

The round was co-led by Flourish Ventures and 1kx, with backing from White Star Capital and Fabric Ventures. With this, the company’s total funding now stands at $9.2 million.

Kulipa builds payment infrastructure that allows fintech companies to issue cards funded directly from stablecoin balances. These cards can be used anywhere card networks are accepted, including for everyday purchases and ATM withdrawals.

Stablecoins already handle more than $300 billion in daily settlements, but their use in everyday payments is still limited. The systems that connect blockchain-based transactions to traditional card networks are still fragmented and usually require large upfront capital.

Kulipa says its platform removes some of these limitations. It verifies balances and settles transactions onchain, reducing the need for prefunding.

At the same time, it takes on fraud liability for issued cards, which lowers operational pressure for its partners.

“Stablecoins have proven their value as a settlement layer, but using them in everyday financial products is still early,” said Axel Cateland, Founder and CEO of Kulipa.

“Card issuance is the bridge between onchain balances and real-world payments. We built Kulipa to give regulated fintech platforms the compliant, capital-efficient infrastructure they need to operate at global scale.”

The company operates what it describes as a local-first model, with regulatory coverage across the European Union, Argentina and Nigeria. It is also working on expansion into the United States through BIN sponsorship.

Kulipa launched its infrastructure in February 2025 and since then, it has issued more than 120,000 cards and signed 20 customers. These include Flutterwave, Solflare, nSave and Ready.

The company also reports a 70% month-on-month increase in transaction volume.

“At Flutterwave, we’re focused on building payment infrastructure that works across markets at scale. As stablecoins become a more practical settlement option, it’s important that businesses can turn those balances into real-world spending,” said Olugbenga Agboola, Founder & CEO of Flutterwave.

“Partnering with Kulipa allows us to extend stablecoin value into globally accepted payments in a compliant, scalable way.”

“Kulipa has enabled Ready to become an onchain alternative to banks,” said Itamar Lesuisse, CEO of Ready. “With their infrastructure, we can issue globally accepted cards directly from stablecoin balances, giving our users seamless access to everyday spending in a compliant and scalable way.”

Kulipa was founded in 2023 by a team with experience across payments, compliance and technology. Cateland previously worked on Apple Pay and Google Pay deployments at Mastercard.

Co-founder and CTO Michael Shynar has worked at WhatsApp and Google, while Head of Compliance Benoit Roger brings experience from Binance and Nickel Bank.

Investors say the company is addressing a key gap in the market.

“We’re seeing stablecoins moving beyond cross-border settlement and becoming part of real financial infrastructure,” said Ameya Upadhyay, General Partner, Flourish Ventures.

“The missing piece has been compliant, scalable card issuance. Kulipa fills that gap by combining capital efficiency with multi-region regulatory coverage, enabling fintech platforms to bring stablecoin settlement into everyday payments.”

1kx Founding Partner Christopher Heymann added, “Stablecoins are reshaping how money moves globally, but for mainstream adoption, people need to spend them as easily as they spend fiat. 

“Kulipa meets users where they already are, starting with the card in their wallet, and gives businesses a turnkey way to offer that experience. We believe this payments layer is critical infrastructure for the next phase of crypto adoption.”

Kulipa says it will use the new funding to strengthen its infrastructure and support more fintech platforms looking to offer stablecoin-based payments at scale.

The post Kulipa Raises $6.2 Million to Expand Stablecoin Card Payments Across Africa, Other Markets appeared first on Tech | Business | Economy.

The report, titled Zero to Funded: A Founder’s Guide to Pre-Seed Fundraising in Africa, was released by Madica, drawing on insights from investors and ecosystem leaders across the continent.

The report takes a closer look at how fundraising actually works at the pre-seed stage and where many African founders get it wrong.

Venture capital is not free money, the report stressed, noting that founders who take it on are entering a long-term relationship that comes with pressure to grow fast, give up equity and eventually provide returns through an exit.

Despite this, many founders still approach fundraising with the wrong assumptions.

One of the most common mistakes, according to the report, is trying to raise money before proving anything in the market. Investors, it says, are not backing ideas alone, they want to see early signs of execution.

“The reality is that investors back passion plus some kind of momentum. Founders with grit can often build that momentum even before they get their first outside cheques.”

That momentum could come in different forms, a basic product, early users, partnerships or even tested assumptions. Without it, founders risk getting stuck in endless pitch cycles.

The report by Madica also challenges the belief, which most African startups have, that building a strong product is enough to attract funding. It says many founders spend too much time developing technology without confirming whether customers actually need it.

“Most founders are super focused on building really good technology, but often they end up solving a problem the customer doesn’t think is a problem.”

Instead, investors want to see clear evidence that founders understand customer pain points and are building solutions people are willing to use and pay for.

Valuation is another area where founders usually get it wrong. While a high valuation may look impressive, the report warns it can create problems later if the business cannot meet expectations.

Startups that raise at inflated valuations risk being forced into down rounds, which can damage investor confidence and weaken the business.

Beyond these misconceptions, the report outlines what signals readiness at the pre-seed stage. Investors are looking for clarity, credibility and early traction rather than polished financial models.

A working product, even if basic, carries more weight than a well-designed pitch deck.

“At pre-seed, the most important thing you really want to focus on is launching the product, testing your hypothesis and identifying your road map to product market fit.”

Growth, the report adds, does not have to be large at this stage. What counts is consistency and the ability to show a pattern.

“What I want to see is repeatability: $10 this month, $20 the next, $30 after that, growth that shows a pattern I can trust.”

Across Africa, the fundraising sector varies by region, but the expectations are largely the same.

West Africa recorded 475 pre-seed deals worth about $219.43 million between 2019 and 2025, making it the most active region. However, most of that capital is concentrated in Nigeria.

North Africa followed with 307 deals valued at $165.58 million, driven largely by Egypt, while East Africa saw 213 deals worth $84.51 million. Southern Africa recorded the lowest activity, with $45.78 million raised across 118 deals.

Even with these differences, investors apply similar standards across the board.

Madica also makes it clear that venture capital is not suitable for every African startups business. It is designed for companies that can scale quickly and deliver large returns within a set timeframe.

For founders building smaller or more localised businesses, other funding options may be more appropriate.

In the end, the report returns to the point that founders who focus on customers, test their ideas early and show progress are more likely to attract funding.

Those who focus only on raising money risk missing the basics that investors care about most.

The post Only 0.05% of Startups Raise VC as Madica Report Reveals What African Founders Get Wrong appeared first on Tech | Business | Economy.

The project is still in its early stages but people familiar with the matter say it may take months before it is ready.

Engineers at OpenAI began exploring the idea after repeated service disruptions on GitHub in recent months disrupted their work. Those outages forced internal teams to reassess how much they rely on external platforms.

From what has been reported, OpenAI has discussed offering the repository as a paid service to its existing customers. That would place it in direct competition with GitHub, which is owned by Microsoft.

Neither OpenAI nor Microsoft has publicly confirmed the plan. The companies did not respond to requests for comment at the time of publication.

If OpenAI moves forward, the decision would test its relationship with Microsoft. The software giant is one of OpenAI’s biggest backers and also controls GitHub, which serves more than 100 million developers worldwide. A competing product from OpenAI would be a rare overlap in their commercial interests.

In February 2026, OpenAI closed a $110 billion funding round that valued the company at $840 billion. Investors in that raise included Amazon, Nvidia and SoftBank.

The deal stands among the largest private capital raises to date and places OpenAI ahead of competitors such as Anthropic and Inflection in valuation terms.

For now, the proposed platform is still under development, with OpenAI still weighing whether to build more of its own infrastructure rather than depend on tools owned by partners.

The post OpenAI Develops GitHub Rival as $840bn Valuation Spurs Expansion appeared first on Tech | Business | Economy.

The funding round was led by Radical Ventures, with participation from a16z Speedrun. New investors include Brendan O’Driscoll and Larry James Erwin.

To date, the company has raised $8.4 million with backers including Radical Ventures, a16z Speedrun and Comma Capital, alongside operators such as Aidan Gomez and executives from Braze.

General Magic builds automated agents for insurance firms. These agents answer routine questions, collect documents and follow up with customers. They operate across the insurance lifecycle, from pre-quote checks to post-quote engagement and claims coordination.

The company says its technology connects directly to broker management systems, quoting platforms and customer relationship systems already in use.

In early deployments with one of the world’s largest general insurers, General Magic reduced quote times from around 30 minutes to less than three. The reduction was achieved through an SMS-based agent that handles clarification and follow-ups automatically.

“Too much of insurance still relies on manual follow-through across calls, inboxes, and scattered systems,” said Jai Mansukhani, co-founder and president of General Magic.

“We focus on keeping customers engaged at every stage of the lifecycle, not just at quote or claim. Our agents handle the routine work that slows teams down, while giving insurance leaders real visibility into what customers are asking, where they are getting stuck, and how they are feeling.

“When that engagement and data flow directly into core systems, teams move faster and customers feel genuinely supported.”

At the centre of the company’s innovation is a product called Cell. It connects to broker systems, rating platforms and CRMs. Teams can deploy it through SMS, iMessage and RCS.

Customers can send questions by text, while the agent pulls data from internal systems, requests missing details and updates records as the process moves forward.

The company is currently working with insurers across motor and life lines, where follow-up after issuing a quote usually determines whether a sale is completed.

General Magic was founded by Anthony Azrak and Jai Mansukhani. Both previously built and sold technology products into established industries, then moved into insurance after dealing with repeated delays and high premiums following a water leak claim.

The founders say the industry works, but customer experience sometimes breaks down during important moments such as quoting and claims.

Retention is also a challenge across the insurance sector. Acquiring new customers costs more than keeping existing ones. With more policies being sold digitally and customers comparing prices at renewal, firms risk losing business after investing time and money to secure it.

Sanjana Basu, partner at Radical Ventures, said: “Most of the world’s financial and insurance data is locked inside rigid, legacy systems that were never designed for the AI era. General Magic isn’t trying to convince enterprises to throw away that infrastructure. Instead, they are giving them a way to finally talk to it. 

“By building a reasoning layer that sits on top of existing systems of record, the General Magic team are unlocking a massive amount of trapped value. 

“This is how the Fortune 500 becomes AI-native. Not by rebuilding from scratch, but by bridging the gap between old data and new intelligence.”

Troy Kirwin, investment partner at a16z Speedrun, added: “We’ve watched Anthony and Jai grow exponentially both during their speedrun cohort and in the months after. They are building a truly compelling product that we believe will revolutionise workflows across insurance carriers and brokerages globally. 

“I have a personal thesis that outsiders will disrupt legacy industries, and General Magic has helped buttress this thesis with the immense progress they’ve made. We are excited to deepen our partnership through supporting their seed round.”

Pete Tessier, BFA, CAIB, president at insurance MGA Taycon Risk, said: “What I have seen with General Magic and their approach to AI was a willingness to adapt to the insurance industry’s needs.

This is significant because of the varied nuances of the insurance industry and how its products are distributed and why internal and external customer journeys are different.

“The challenge will be making it scale across all channels of insurance product distribution. This might be the first true ‘game changer’ for the industry and deliver on customer experience and expectations”

General Magic plans to expand into more insurance lines and workflows with a focus on high-intent moments where communication gaps cost brokers and insurers time and revenue.

The post General Magic Raises $7.2m Seed Funding to Cut Insurance Quote Time to Three Minutes appeared first on Tech | Business | Economy.

The new investment was led by Lux Capital and brings the Nigerian defence technology company’s total funding to $34 million since it launched in 2024.

The extension round also drew participation from 8VC, Nova Global, and Resiliience17 Capital, a firm founded by Flutterwave chief executive Olugbenga Agboola.

Terra Industries was founded by Nathan Nwachuku, 22, and Maxwell Maduka, 24. The company designs infrastructure and autonomous systems that help governments monitor and respond to security threats. 

Based in Nigeria, the startup has begun expanding into other African countries, though it has not yet named them.

Terrorism is a major threat across parts of Africa. Many countries still depend on intelligence and defence systems supplied by Russia, China or Western nations. 

In January, Nwachuku said he wanted to build “Africa’s first defence prime, to build autonomous defence systems and other systems to protect our critical infrastructure and resources from armed attacks.”

At that time, Terra had secured its first federal contract. The company now serves both government and commercial clients. Nwachuku said Terra has generated more than $2.5 million in commercial revenue and is protecting assets valued at about $11 billion.

He said the latest funding came together in under two weeks because of “strong momentum.” Investors, he added, saw “faster-than-expected traction” in new deals and partnerships, which pushed them to increase their commitments quickly.

Part of that growth includes a contract with AIC Steel. The agreement allows Terra to set up a joint manufacturing facility in Saudi Arabia to build surveillance infrastructure and security systems. “It’s our first major manufacturing expansion outside Africa,” Nwachuku said.

The company is now focusing on countries in sub-Saharan Africa and the Sahel, where infrastructure security remains a pressing issue. “The priority is working with countries where terrorism and infrastructure security are major national concerns,” he said.

He also pointed to the scale of the problem. “We’re focused on targeting major economies where the need for infrastructure security is urgent and where our solutions can make a meaningful impact. That’s how we think about expansion.”

Defence technology is capital-intensive. In the United States, companies such as Anduril Industries have raised more than $2.5 billion, while Shield AI has secured around $1 billion in equity funding. 

Drone maker Skydio has raised about $740 million, and naval autonomous vessel company Saronic has secured roughly $830 million.

Terra Industries funding is smaller by comparison. Even so, its rapid fundraising and early contracts imply that investors are getting more interested in defence innovation on the continent. 

The post Nigeria’s Terra Industries Raises $22m From Lux Capital, Total Funding Hits $34m appeared first on Tech | Business | Economy.

But the thing is, capital wasn’t just flowing. There was a concentration, with large checks, especially for artificial intelligence companies. 

About 74% of January funding went to deals of $100 million or more, and 57% went to AI-related startups alone. 

However, if you stood back and looked at markets and capital flows in early 2026, you’d see something quite different, fundamental change. 

Tech isn’t responding to an upswing in funding anymore. It’s adapting to new investor priorities, and market situations that are very different from the era of easy capital that impacted the late 2010s and early 2020s.

So what changed?

For most of the past decade, cheap money allowed tech growth, interest rates in certain economies were at historical lows, investors hungry for yield and growth poured capital into startups before they had profit, let alone profits. 

Risk was quite blurry during that era, valuations were amplified and growth at all costs was made workable, if fragile, a strategy.

Today, it doesn’t work that way anymore.

Interest rates globally are higher than they’ve been for years. Monetary policy became tougher after pandemic stimulus faded, inflation returned in many regions, and central banks moved quickly to raise rates to rein in prices. 

That made capital more expensive and investors much pickier.

Funding isn’t gone, it’s just concentrated

Despite the narrative of a “funding winter,” KPMG’s latest data shows global VC investment hit more than $138 billion in the fourth quarter of 2025, ending the year with one of the strongest totals on record. 

But that masks an important trend where capital isn’t broadly distributed anymore. Investors are placing large investments on a narrow set of opportunities.

Take AI. It wasn’t just one sector among many. In 2025, AI startups drew outsized rounds, dozens of companies raised hundreds of millions, or even billion-dollar-plus investments. 

The funds aren’t trickling down to every idea with a good pitch. They’re clustering around a few big names and high-conviction focus.

That shift is unignorable. It means the cost of money isn’t just higher, the bar for attracting it is, too.

A tale of two tech markets

Investors are talking about discipline, transparency, and profitability. According to a global investor survey, 61% of investors still see technology as the top sector for capital growth over the next few years, but they want transparent disclosures about strategy and returns, especially around AI. 

In the first week of February 2026, global indexes experienced turbulence as software and tech stocks were sold off. Valuations slipped due to investor anxiety over whether heavy AI spending by big tech firms, think multibillion-dollar capex plans, will translate to profit. 

Big names like Alphabet and Microsoft have seen their stock prices fluctuate at times because markets are questioning the returns on massive AI investments outweighing near-term costs.

At the same time, alternative corners of tech are attracting fresh interest. There’s a noticeable shift toward smaller-cap and value-oriented companies as investors rotate out of speculative growth names and into sectors they deem safer or more resilient. 

Layoffs and recalibration

Again, looking at the workforce, 2025 saw a large number of layoffs in the tech industry, from startups to giants. 

Thousands of jobs were cut as companies recalibrated their cost structures and refocused priorities. Those layoffs reveal the stress on growth models that relied on scale and user acquisition over cash flow and efficiency.

For founders, this has been painful and humbling. People who raised capital on promises of growth now find investors demanding sharper unit economics and quicker paths to profit.

That’s not a backlash against innovation but a higher level of financial discipline driven by macro conditions.

Where tech still finds money

Despite all of this, there are good areas.

AI commands attention. There were more than 55 U.S. AI startups raising $100 million or more in 2025 alone, showing that deep technology with good enterprise value still attracts serious capital. 

These are not small checks but major commitments by major investors.

Even beyond AI, the VC world saw robust exit activity, mergers and acquisitions and IPOs contributed to healthy exit values as companies matured and found liquidity. 

And while data from regional ecosystems varies, many markets are resilient. In Africa, for example, funding rebounded strongly in 2025, with total capital rising and diversified instruments, including debt, playing a bigger part. 

The reality for most founders

So what does this all mean for tech founders and executives?

For one, the era of ‘raise more at any cost’ is clearly over. Investors are looking for companies that can articulate solid paths to cash flow and sustainable growth. They care about what you do with capital, not just how fast you can spend it.

Second, capital is still available, but it’s more selective. AI and related infrastructure are prime targets, but other sectors must prove strong business models to win larger commitments.

Third, the shift isn’t a simple downturn but a reset. Tech is learning to grow within macro challenges. That’s a healthier paradigm in the long term, even if it seems harsher in the short term.

Some founders feel blindsided because they raised a comfortable round only to find subsequent meetings turning into critiques of burn rates and go-to-market strategy. That is real, but it’s also a reflection of markets that now price risk differently.

Tech hasn’t lost its spark, far from it. Funding is still high, deals continue to get done, and innovation is very much alive. 

What has changed is the price of patience, clarity and discipline. Cheap money didn’t just drive ideas, it impacted expectations, which should ultimately lead to tech growth.

Now those expectations are adjusting to a world where capital is not easy money. It’s selective, expensive and demanding.

And that is important, because founders today must build fast, and build wisely.

The post When Money Stopped Being Cheap, Tech Had to Grow Up appeared first on Tech | Business | Economy.