Fintech still dominates venture capital in Africa, but it may belong to deep tech for the next decade, investors said at technology gathering SWEAT Africa in Stellenbosch, South Africa, on February 13 and 14.
From biotech and advanced materials to AI-driven health solutions, investors see deep tech as the continent’s most defensible innovation bet. The challenge for founders is navigating scientific uncertainties, regulatory hurdles, and commercialization pathways in a sector where many of Africa’s ecosystems are still nascent.
VC funding in Africa remains concentrated in fintech and four markets: South Africa, Nigeria, Kenya and Egypt. The share of deep tech is rising, but the scale is small.
According to the 2025 Global Ecosystem Index, deep tech funding in sub-Saharan Africa is estimated at approximately $100 million in 2024, compared to tens of billions of dollars in Europe, North America, and Asia.
“Deep tech is often perceived as being more difficult, more regulated, more scientific and more capital intensive. That complexity makes many venture capitalists wary,” said Rowena Luk, managing partner at African Health Ventures.
But Luk said that while fintech is regulated, investors are just understanding it better. “Many VCs come from finance backgrounds, so underwriting payments infrastructure and digital loans is intuitive. Underwriting molecular biology and medical devices requires a different skill set,” she says.
This gap is why specialist funds like African Health Ventures (healthcare), OneBio (biotech) and Savant (deep tech) are emerging to assess scientific risks and regulatory pathways.
AI drives VCs towards deep tech
Luk argued that the global boom in AI is causing investors to focus more on deep tech. AI has lowered the barrier to building pure software startups, making them easier to copy. Deep tech, on the other hand, offers stronger protection.
Luk said scientific inventions based on discoveries can be locked in by patents, giving companies exclusive rights for up to 20 years. Additionally, regulatory approvals and clinical trials take years, creating hurdles that competitors cannot quickly overcome.
That idea is showing up in African health and genetics research.
“We’re looking retrospectively at what diseases people are suffering from and why, and using AI to identify risks early on,” said Wayne Stocks, an investor at venture capital fund University Technology Fund.
With limited hospital capacity across Africa, predictive models have the potential to shift care from treatment to prevention.
Africa’s diverse population is a major advantage. The continent has the world’s youngest population and a rich mix of languages and cultures.
“Drug discovery is largely Western-centric, and there are high resistance rates in Africa where treatments have not yet been developed. That’s where developing locally using AI has a huge advantage,” Stocks added.
Behavior change, the toughest deep tech problem for founders
For founders working in rural areas, obtaining venture capital is about trust and changing user behavior. Chigojirim Israel, founder of climate intelligence startup Liwe, said the adoption of deep technology in rural Africa depends not only on technology but also on culture.
“Deep tech is difficult to scale in Africa because of infrastructure, behavioral and cultural hurdles,” he said. Connectivity gaps, access to devices, and uneven government infrastructure continue to constrain adoption across rural Nigeria.
“They will only pay for what they believe will work for them. If they don’t change their behavior, they won’t have a scalable business model,” Chigojirim says.
Riwe provides climate and agricultural data to insurance companies and banks, enabling them to lend to farmers. This model still requires on-the-ground adoption by farmers.
He likened the challenge to Uber-style market creation, saying, “We’re trying to make access to credit and insurance second nature. Until that cultural shift happens, we have a long way to go.”
Riwe is now commercially available, moving from pilots to implementation in financial institutions and the agricultural community. “We’re still in the process of persuading insurance companies and banks state by state to sell it until it becomes mainstream,” he said.
What African deep tech founders have to show
Investors consistently highlighted three hurdles: technology risk, commercial traction, and team commitment.
On the stock market, investors will fund the transition from laboratory validation to pilots, he said, but not pure research. “If you’re still in the lab and don’t know much about it, the technical risks are too great,” he says. A minimum viable product, working diagnostic, device, or validated algorithm is essential before entering VC.
University founders often treat startups as side projects. “Too many founders are hobbyists. They work weekends. That doesn’t create success,” Stocks said. He eschews individual founders, arguing that deep tech requires a combination of scientific, commercial and operational skills.
Jack Glassman, senior investment analyst at investment fund AfricaGrow, said deep tech companies still need to fit into VC’s growth logic.
“You need some form of market traction and a compelling scalability case. Ideally, you understand your customers and are already seeing revenue,” he said. Without that, startups require slower, more patient capital, such as grants.
University deep tech needs to retreat from labs
Investors emphasized the central role of academia in creating scalable deep tech startups. Luk calls universities the “foundation of the deep tech ecosystem” if innovation and ideas are taken out of the lab.
However, Africa lacks a strong technology transfer pipeline compared to the United States or Europe.
Stocks are witnessing this gap. “There are very few deep tech investors, and many countries don’t even have tech transfer offices to spin out research,” he said after working in Nigeria and Egypt, promising that science rarely turns into venture-backable startups.
Accelerators and commercialization programs are emerging to bridge this gap. Jaquis pointed to initiatives like BRAIN that help scientists transition “between zero and one” from research to investable ventures. For VCs, such programs serve as a preselection and risk aversion layer.
Why deep tech needs a “village”
Houda Ghozzi, founder and CEO of nonprofit accelerator Open Startup, says running a deep tech accelerator program requires more than a curriculum and demo day.
“It takes a village,” she said. “We’re always identifying who we can connect with, whether it’s venture capitalists, corporates, technology advisors, industry experts. The people we bring around a startup are like a mosaic, and it allows them to operate in a safer space.”
Of Open Startup’s 10-year portfolio of about 600 startups, about 60% are still active and 45% have raised funding, Gozzi said. BRAIN, a program with a special focus on scientific spinouts, has supported approximately 40 startups, accelerated 25, and funded 17 companies, generating over $7 million in revenue. Approximately 25% have tripled in valuation and 30% have expanded internationally.
Gozzi pointed out that despite the challenges, the company’s focus is that “science will enable us to solve the continent’s real problems of water, food and health. It’s much more difficult. But once we get there, we will thrive because the market needs those solutions.”
Capital shift is progressing, albeit slowly
Despite structural barriers, investors say capital is gradually being reallocated to deep tech globally and in Africa. “Deep tech in Africa is not a niche field; it is part of a global reallocation of capital towards defensible infrastructure-level innovation,” Luk said of the strategic shift.
For now, fintech still dominates VC in Africa. But as AI commoditizes software and climate health concerns intensify, investors expect to see more funding targeted at science-driven startups and more founders from African labs ready to scale globally.
The opportunity for deep tech in Africa is real, but venture capital-ready startups must overcome the most difficult step: turning world-class research into scalable products with the traction, teams, and regulatory pathways that investors can take on.
