The African Finance Corporation (AFC) has made a significant move by committing up to $100 million to support technology-focused venture capital fund managers in Africa. This marks a notable first for a financial institution entering the asset class as an institutional limited partner.
Based in Lagos, the multilateral financial company announced that its board approved this commitment on May 18, 2026. AFC has already secured anchor stakes in Literock Africa Fund II and Future Africa Fund III. Established in 2007, the AFC has successfully deployed over $19 billion across 36 African nations, primarily investing in infrastructure projects rather than venture capital.
Importance of Local Capital
According to the AFC, African startups are projected to raise $3.8 billion in 2025. The continent has produced nine unicorns to date, and some of the earliest African funds have yielded returns as high as 128 times their invested capital. However, local institutional investors still play a limited role in most fund capitalization tables, with the majority of venture funding originating from outside Africa.
AFC views its commitment as catalytic capital aimed at encouraging more African institutional investors, such as pension funds and insurance companies, to participate in venture capital. The organization is actively exploring additional Africa-focused funds at various stages and strategies, with plans for further allocations in the near future.
Anchor Commitment Details
AFC’s allocation to the Lightrock Africa Fund II builds on an existing partnership that has already led to co-investments in notable ventures including Nigerian fintech Moniepoint, South African business banking platform Lula, and pay-as-you-go solar investment company M-KOPA. Pal-Eric Chatil, managing partner and CEO of Lightrock, noted that the new capital will be used to support high-growth, technology-enabled businesses that have proven business models, sound fundamentals, and a clear path to profitability.
Additionally, the Future Africa Fund III anchor extends AFC’s reach into early-stage ventures. Future Africa is curating a portfolio that encompasses various sectors, including financial inclusion, digital infrastructure, consumer technology, and education. Founded in 2020 by Iain Aboyeji—co-founder of Andera and Flutterwave—Future Africa has evolved from an angel group into a multi-fund manager.
AFC’s Foray into Uncommon Asset Class
AFC President and CEO Samaira Zubair emphasized that this move reflects a growing recognition of digital infrastructure as critical to Africa’s industrial agenda, ranking it alongside traditional sectors such as roads, railways, ports, and power. The AFC projects that Africa’s digital economy could contribute over $700 billion to the continent’s GDP by 2050, largely driven by its youthful population and rapid technology adoption by businesses.
Aboyeji highlighted the significance of AFC’s partnership as the first multilateral development bank collaboration in Future Africa’s journey, adding that its commitment serves as the essential anchor at this pivotal moment. He expressed hope that other development finance institutions, insurance companies, and pension funds will follow in AFC’s footsteps to further bolster the growth of Africa’s venture capital landscape.
With 48 member countries, the AFC operates as a multilateral development finance institution. Its new fund of funds initiative aligns with a broader strategy focused on enhancing integrated infrastructure systems, where digital platforms complement physical assets in driving economic growth throughout the continent.
