Africa’s tech ecosystem raised $1.44 billion in the first half of 2026, according to a new report from TechCabal Insights. This marks a modest 1.4% increase from the $1.42 billion recorded in H1 2025. But beyond the number, the broader picture points to an ecosystem that is stabilising in value and contracting in participation.

The report, titled State of Tech in Africa H1 2026, and produced in collaboration with sponsor and partner Fido, a fintech that provides instant, unsecured digital loans and financial services, tracked 146 disclosed transactions across the continent in H1 2026, down from 252 in the same period last year. That is a 42% decline in deal volume, the steepest the ecosystem has recorded in four years, even as total capital inflows held steady.

Early-stage startups bore the brunt of that pullback. Deals under $500,000 accounted for just 19% of all transactions in H1 2026, and overall early-stage funding fell to $9 million, down from $25 million in H1 2025. Investors, it appears, are growing more selective about where they place risk capital, favouring startups that have already proven their models over newer entrants still finding theirs.

That caution shows up clearly in the sector breakdown. Climate tech, spanning logistics and transport, energy and water, agriculture, waste management, and sustainable services, pulled in $688 million in H1 2026, overtaking fintech’s $488 million for the first time. It is a notable shift for an ecosystem long dominated by fintech, and it points to investors chasing tangible, real-economy infrastructure over purely digital plays. Taken together, the data suggests capital is no longer being used primarily to seed new companies. It is being concentrated into more mature businesses already generating measurable returns.

That same pattern of consolidation carried into how companies themselves behaved. Mergers and acquisitions surged 91% year-on-year, climbing to 63 completed deals in H1 2026 from 33 in H1 2025. This represents the highest M&A deals the ecosystem recorded in such a span, and was only five short of the 68 deals recorded throughout 2025.  Southern Africa led the wave, accounting for 18 of those deals, with South Africa alone responsible for 16 acquisitions. Nigeria followed with 10, Egypt with 9, and Kenya with 7, while Northern and Western Africa recorded 13 and 12 respectively.

Since 2019, African startups have raised a cumulative $21.6 billion across 3,925 deals, with Nigeria and Kenya alone accounting for nearly 44% of that total. What H1 2026 suggests is a market entering a new phase of that story, one where survival and scale define who gets funded next.