Experts at a recent roundtable held by Fluxis Capital in Lagos have highlighted the increasing importance of debt in Africa’s startup ecosystem amid slowing venture capital inflows. The event featured founders, investors, and debt providers discussing the shift towards alternative financing options. Tolulope Omoleye-Osindero, founder of Fluxis Capital, opened the dialogue by noting a significant drop in venture capital funding: “In 2021, startups across Africa raised over $5 billion, but today we are seeing much smaller numbers.
This has been described as a funding winter. Founders can no longer rely only on equity; they have to show stronger revenue models, and debt is increasingly becoming part of the growth conversation,” she said. In the first half of 2025, African startups raised about $1.35 billion, with $400 million coming from debt, marking a 55 percent increase from the same period last year.
Against the backdrop of slowing venture capital inflows, speakers described debt as “a lifeline” and “a tool for long-term growth.”
The event, held at the UNDP Innovation Centre in Ikoyi, featured three panels:
1. Borrowers Panel – Unlocking Growth with Debt: Founders discussed lessons from raising and using debt in Nigeria’s challenging market, citing real examples of scaling logistics, fintech, and consumer businesses.
Debt gains traction in Africa’s startups
2. Lenders Panel – What Debt Providers Actually Look For: Bankers and private credit providers highlighted factors such as governance, repayment history, and transparent financials as signals of credit readiness. 3.
Investor Panel – Smart Capital Architecture: Investors and development finance institutions explained how blended structures like equity mixed with debt and grants can improve sustainability and reduce risk. Throughout the discussions, speakers emphasized better borrower preparation, the need for hybrid capital models, and a stronger relationship between traditional financiers and Nigeria’s tech community. A panellist summarized the strategic role of different capital types, explaining, “Equity is there to fund the vision, but debt is what you use to build the machine.” This sentiment resonated in discussions about using debt for tangible needs like financing assets or funding working capital while reserving equity for more strategic, long-term bets.
By hosting the conversation in an off-the-record setting, Fluxis Capital created space for honest exchanges between entrepreneurs and financiers. Participants left with clearer views on how startups can build businesses that attract debt and how investors might structure smarter deals for long-term impact. Fluxis Capital reaffirmed its commitment to supporting Nigeria’s entrepreneurial ecosystem by fostering dialogue and practical solutions that strengthen both startups and the investors backing them.