Africa’s tech boom hits a funding wall

Africa’s stock markets enjoyed a spectacular year in 2025, with their combined value growing by 49%, more than double the global average. Yet only seven companies across the continent completed initial public offerings (IPOs), raising just $1-billion between them.

The contrast, revealed in the OECD’s Africa Capital Markets Report 2026, released last week (6 November), exposes a major weakness in the continent’s ability to finance business growth. It also raises questions about the ability of Africa’s expanding technology industry to secure the substantial capital needed to compete globally.

African stock market capitalisation reached $836-billion at the end of 2025, equivalent to 43% of the continent’s gross domestic product. Globally, the figure was 128%, and across emerging markets 68%.

The growth came overwhelmingly from increases in the value of companies already listed. New listings accounted for only 3% of the increase in market capitalisation, with higher mining company valuations contributing to the boom.

“Yet markets remain small and illiquid, with concentrated ownership,” says the OECD in its assessment accompanying the report.

The contrast with Africa’s technology funding ecosystem is stark. According to venture capital firm Partech, African technology startups raised $4.1-billion in 2025, an increase of 25% on the previous year.

Equity funding reached $2.4-billion across 462 deals, and debt funding reached a record $1.6-billion. Fintech remained the largest recipient of equity investment, although clean technology, health technology and enterprise software also attracted growing interest.

“This year’s rebound highlights the resilience of African founders and the growing sophistication of capital markets across the continent,” said Tidjane Dème, general partner at Partech Africa, when the firm released its annual venture capital report in January.

South Africa reclaimed the lead in equity investment, attracting more venture capital and recording more deals than any other African market for the first time since 2017. Yet, even with Johannesburg offering the continent’s largest stock exchange, technology companies have few examples to follow when seeking a public listing.

High listing costs are obstacles across Africa

Venture capital can finance the early development of a business, but investors eventually need opportunities to sell their shares and recover their capital. Successful companies also need access to larger pools of funding as they expand internationally.

Public stock exchanges provide one such route, but high listing costs and demanding eligibility criteria are obstacles across much of Africa.

Most African markets require three years of audited financial statements, with many also demanding a record of profitability extending from one to five years.

Such requirements can exclude technology companies that have large customer bases but continue to reinvest revenue in product development and expansion. Their valuations may depend heavily on future earnings, leaving them poorly suited to listing rules.

Brazil and India have introduced alternative listing pathways that relax profitability requirements. The United Kingdom places greater emphasis on disclosure and investor protection than on historical financial performance, giving companies with different growth models greater scope to seek public investment.

Costs create an additional problem. Across African markets, smaller companies pay proportionately more in listing fees than large companies. In Tanzania and Zambia, the difference can be as much as tenfold.

“These costs can be particularly burdensome for smaller companies, limiting their ability to access public equity and constraining the pipeline of new listings,” says the OECD in a chapter on public equity markets.

Liquidity adds another obstacle. Investors need the ability to buy and sell shares without causing substantial price movements, but trading activity remains limited on many African exchanges.

Even the continent’s most liquid markets, Morocco, South Africa and Egypt, recorded turnover ratios of between 13% and 42% in 2025. Across the other markets examined, turnover ratios were below 9%.

Companies from several African countries consequently raise a significant share of their public equity capital on foreign exchanges, where they can access larger investor pools and more active trading markets. The United Kingdom is the most common destination outside Africa.

South Africa is the only African market that attracts a significant share of foreign listings by companies from elsewhere on the continent.

One company that successfully crossed the divide was Optasia, the AI-powered financial technology business that listed on the Johannesburg Stock Exchange in November 2025.

Its technology helps financial institutions assess credit eligibility and provide financial services to customers in emerging markets. The share offering raised R6.5-billion, giving the company a market capitalisation of R23.5-billion at the listing price.

“An African company listing on an African exchange was just a natural thing for us,” Optasia founder Bassim Haidar told Bloomberg at the listing.

The company had already established a large international business, with operations extending across emerging markets. Its listing gave earlier investors a route to realise part of their investment and provided the company with fresh capital for expansion.

Of the R6.5-billion share offering, R1.3-billion represented new shares issued by the company. The balance involved existing shares sold by investors, demonstrating how a public listing can simultaneously finance expansion and provide an exit for early backers.

The OECD reports that companies already listed on African exchanges raised $5.7-billion through additional share offerings in 2025, compared with the $1-billion raised through IPOs. In South Africa alone, 11 existing listed companies raised $4.3-billion.

Many African exchanges have attempted to encourage younger companies by creating alternative growth markets with lower admission requirements. These include the JSE’s AltX, where companies face more flexible financial eligibility rules, but must retain designated advisers.

New listings remain limited despite reforms

The number of new listings remains limited despite these reforms. Some alternative markets hold onto financial admission requirements that differ only modestly from the main exchange, reducing their appeal to smaller companies.

The OECD also identifies the size of the investor base as a fundamental obstacle. Pension funds and insurance companies can provide long-term funding, but their assets are concentrated in a small number of African countries.

Institutional investors account for only 21% of African listed equity ownership, compared with 47% globally. The continent also accounts for just 0.9% of global financial assets despite generating 2.7% of global GDP.

The financing problem extends to venture capital funds, which depend on successful exits to return money to investors and raise capital for subsequent investments.

Where public listings are rare, those funds must rely more heavily on acquisitions and sales to other private investors. The availability of buyers, and the prices they are prepared to pay, can determine how readily investment capital is recycled into younger companies.

Partech’s research reveals a growing concentration of investment in companies that have progressed beyond their earliest development stages. Equity funding increased by 8% in 2025, but the number of deals grew by only 1%, showing that more capital was going into larger investment rounds.

The OECD also examines the role of technology in expanding participation in capital markets. Digital investment platforms are making it easier for individual investors to buy securities, with initiatives in Nigeria extending access beyond traditional stockbroking customers.

Electronic trading and faster settlement systems are improving market efficiency, and cross-border trading arrangements could connect fragmented exchanges, giving companies access to investors across multiple markets. These developments could reduce the costs associated with raising capital, but the OECD identifies the shortage of investment opportunities as a barrier.

The OECD’s recommendations include reducing IPO costs, simplifying admission requirements and increasing institutional participation. The report also examines how pension and insurance reform could channel more domestic savings into long-term investment.

“A narrow investor profile limits depth and resilience in many African capital markets,” says the OECD.