The $100 million capital and Africa’s two-speed investment market

Investors are pouring billions into large-scale African infrastructure and consolidation plays, but the middle market is being squeezed. Data available to BusinessDay Hek shows that Africa saw 27 transactions exceeding US$100m in the first half of 2026 compared to 15 transactions in H1 2025. Deal count rose 80 per cent, while deployed capital jumped 244 per cent. Just one large deal reportedly dominated disclosed M&A value, while debt structures accounted for a significant share of the activity.

This is a dramatic rewrite from, the narrative surrounding private capital in Africa. The narrative has followed a predictable script involving plenty of hype, a flurry of early-stage venture rounds, but a frustrating scarcity of the late-stage mega-deals needed to truly move the needle.

A dual-city story and the Nigerian stake
Beyond the above headline figures, the market is becoming a tale of two cities, with a significant rotation from venture capital to private equity is under way and private equity (PE) surpassing venture capital (VC) in deal volume for the first time since 2019. Simultaneously, the middle market comprising deals between US$2.5 million and US$75 million is witnessing an all-end squeez as its share of disclosed deals fell to 37 per cent in the second quarter (Q2), from 54 per cent in the first quarter (Q1). Hek notes that investors are directing capital towards either large-scale, defensive infrastructure plays or smaller, high-growth tech bets. Meanwhile, mid-cap companies are finding it harder to attract capital despite being, largely, the backbone of economic transformation.

This trend is exemplified by Nigeria, which accounted for 63 of the 221 transactions in Q2 2026, carrying US$8 billion of West Africa’s US$8.9 billion in disclosed value. However, much of this was concentrated in a handful of mega-deals, creating a top-heavy market. Egypt, by contrast, showed greater depth in the mid-market, accounting for 55 per cent of all large transactions between US$25 million to US$75 million in Q1 in activities spread across consumer goods and manufacturing.

Reality checks, exits and investor implications
The massive leap in capital deployment points to stabilizing asset valuations. The valuation mismatches that paralyzed late-stage funding in recent years have largely corrected. As global private equity giants and development finance institutions (DFIs) ramp up price entry points discovery backed by secular tailwinds, this influx of mega-deals creates a two-tiered market. While institutional-grade infrastructure projects are awash with liquidity, early-to-mid stage companies face a high bar to graduation.

Incidentally, entering a market is just half the battle and harbour the critical part. For the momentum of H1 2026 to be sustained into a permanent structural trend therefore, the next two years must demonstrate that this influx of over US$100 million capital can eventually find secondary buyers or strategic acquirers.