While fintech still dominates Africa’s venture capital, the next decade may belong to deeptech, investors said at SWEAT Africa, a tech gathering in Stellenbosch, South Africa, on February 13-14.
From biotech and advanced materials to AI-driven health solutions, investors see deeptech as the continent’s most defensible innovation bet. The challenge for founders lies in navigating scientific uncertainty, regulatory hurdles, and commercialisation pathways, areas where many African ecosystems are still taking shape.
Africa’s VC funding remains concentrated in fintech and in four markets: South Africa, Nigeria, Kenya, and Egypt. Deeptech’s share is rising, but from a small base.
A 2025 global ecosystems index estimates Sub‑Saharan Africa’s deeptech funding at roughly $0.1 billion in 2024, versus tens of billions in Europe, North America and Asia.
“Deeptech is often perceived as harder, more regulated, more science, more capital-intensive. That complexity makes many VCs cautious,” said Rowena Luk, managing partner at Africa Health Ventures.
But Luk said that, as much as fintech is regulated, investors simply understand it better. “Many VCs come from finance, so underwriting payments infrastructure or digital lending feels intuitive. Underwriting molecular biology or medical devices requires a different skill set,” she said.
That gap is why specialised funds like Africa Health Ventures (healthcare), OneBio (biotech), and Savant (deeptech) are emerging to assess scientific risk and regulatory pathways.
AI is pushing VCs towards deeptech
Luk argued the AI global boom is making investors pay more attention to deeptech. Pure software startups are easier to copy now because AI has lowered the barriers to building them. Deeptech, on the other hand, offers stronger protection.
Luk said scientific inventions based on discoveries can be locked in through patents, giving companies exclusive rights for up to 20 years. On top of that, regulatory approvals and clinical testing take years, creating hurdles that competitors can’t quickly overcome.
That idea shows up in Africa’s health and genetics research.
“We are retrospectively looking at what illnesses people suffer from and why, then using AI to identify risk earlier,” Wayne Stocks, an investor at University Technology Fund, a venture capital fund, said.
With limited hospital capacity across Africa, predictive models could shift care from treatment to prevention.
Africa’s diverse population is a powerful advantage. The continent has one of the world’s youngest populations and a rich mix of languages and cultures.
“Drug discovery is largely western-centred and resistance rates in Africa are high because therapies were not developed for us. That’s where we have a massive advantage of using AI to develop locally,” Stocks added.
Behaviour change, the hardest deeptech problem for founders
For founders working in rural areas, winning venture capital is about trust and changing user behaviour. Chigozirim Israel, founder of the climate‑intelligence startup Riwe, said deeptech adoption in rural Africa depends as much on culture as on technology.
“Scaling deeptech in Africa is difficult as there are infrastructural, behavioural, and cultural hurdles,” he said. Connectivity gaps, device access, and uneven government infrastructure still constrain deployment across rural Nigeria.
“They will only pay for what they believe works for them. If you’ve not changed behaviour, you don’t have a scalable business model,” Chigozirim said.
Riwe provides climate and agricultural data to insurers and banks to unlock financing for farmers, a business-to-business-to-consumer model that still requires farmer adoption on the ground.
He compared the task to Uber-style market creation: “We’re trying to make accessing credit and insurance second nature. Until that cultural shift happens, we have a long road ahead.”
Riwe is now in commercialisation, moving from pilots to adoption across financial institutions and farming communities. “We’re at the point of sales, convincing insurers and banks state by state, until adoption is mainstream,” he said.
What African deeptech founders must show
Investors consistently highlighted three hurdles: technology risk, commercial traction, and team commitment.
Stocks said investors will fund the jump from lab validation to pilots, but not pure research. “If you’re still in the lab and not sure, there’s too much technical risk,” he said. Minimum viable products, working diagnostics, devices, or validated algorithms are essential before VC entry.
Academic founders often treat startups as side projects. “We get far too many founders where it’s a hobby; they work on weekends. That’s not how you create success,” Stocks said. He avoids solo founders, arguing that deeptech needs combined scientific, commercial, and operational skills.
Jacques Grassmann, senior investment analyst, AfricaGrow, an investment fund, said deeptech companies must still fit VC growth logic.
“You need some form of market traction and a scalability case that is convincing. Ideally, you understand your customers and have revenue coming in already,” he said. Without that, startups need slower, patient capital, such as grants.
Universities’ deeptech needs to exit the lab
Investors stressed academia’s central role in producing scalable deeptech startups. Luk calls universities “the bedrock of deeptech ecosystems,” if their innovations and ideas can move out of the lab.
But Africa lacks strong technology-transfer pipelines compared to the US or Europe.
Stocks see the gap firsthand. “There are very few deeptech investors and many countries don’t even have technology transfer offices to spin out research,” he said after his engagements in Nigeria and Egypt, promising that science rarely becomes venture-backable startups.
Accelerators and commercialisation programmes are emerging to bridge this. Jacquis pointed to initiatives like BRAIN, which help scientists move “between zero and one” from research to investable ventures. For VCs, such programmes act as pre-selection and de-risking layers.
Why deeptech needs “a village”
Houda Ghozzi, the founder and CEO of Open Startup, a non-profit accelerator, said running deeptech accelerator programmes requires far more than curriculum and demo days.
“It takes a village,” she said. “You’re constantly identifying who can connect with whom, VCs, corporates, tech advisors, industry experts. It’s a mosaic of people you bring around startups, so they navigate in a safer space.”
Across Open Startup’s decade-long portfolio of about 600 startups, Ghozzi said roughly 60% remain active, and 45% have raised funding. Within BRAIN, a programme specifically focused on science spin-outs, around 40 startups have been supported, 25 accelerated, and 17 funded, generating over $7 million in revenue. About 25% have tripled in valuation, and 30% expanded internationally.
Ghozzi noted that the firm focuses on despite difficulty because “Science allows us to solve the real problems of the continent, water, food, and health. It’s much more difficult. But when you get there, it thrives, because the market needs those solutions.”
The capital shift is slow, but underway
Despite structural barriers, investors say capital is gradually reallocating toward deeptech globally and in Africa. Luk said as a strategic shift: “African deeptech is not a niche play. It is part of a global reallocation of capital toward defensible, infrastructure-level innovation.”
For now, fintech still dominates African VC. But as AI commoditises software and climate-health challenges intensify, investors expect more funds targeting science-driven startups, and more founders emerging from African labs ready to scale globally.
Africa’s deeptech opportunity is real, but VC-ready startups must cross the hardest step: turning world-class research into scalable products with traction, teams, and regulatory pathways investors can underwrite.
