For years, buying a car in Lagos was more than a transaction - it was a test of patience, endurance, and luck. Navigating a maze of unreliable dealers, complex paperwork, and limited financing options left many would-be car owners frustrated.
Etop Ikpe knew this pain intimately. In 2021, he set out to change it with his startup, Autochek. His vision quickly caught the attention of an unexpected partner from halfway across the world: Toyota Tsusho’s venture arm, Mobility 54.
The Japanese VC firm joined a $13.1 million funding round, providing the fuel for Autochek to expand into Ghana, Kenya, and Uganda. Earlier, Kepple Africa, another Japanese venture firm, had backed the startup during its pre-seed round.
For Ikpe, these investments were a validation that Africa’s innovators were starting to attract serious global attention, particularly from Japanese venture firms with industrial know-how and deep global reach.
This is no isolated case. Just a week ago, Uncovered Fund and Monnex Ventures, Japanese VC firms, announced a $20 million fund to support African startups.
Other major transactions include SBI Holdings’ $80 million injection into Novastar Ventures, the $43 million pan-African venture fund raised by Kepple Africa and Verod Holdings, and Samurai Incubator Africa’s second General Partnership fund worth roughly $18.6 million.
These investment trends reveal a clear pattern: Japanese venture capital is steadily expanding its footprint across Africa.
The rise of Africa’s startup and innovation ecosystem
Over the past decade, Africa has witnessed an explosion of innovation. Entrepreneurs across fintech, health tech, agtech, and climate tech are building solutions that were unimaginable just a generation ago.
Funding for African startups reached an all-time high of over $5 billion in 2021, according to Briter. Even as global markets cooled in 2023 and 2024, Africa continued to attract capital at levels far above those of a decade ago.
The continent’s startup funding growth is inspiring. Between January and May 2025 alone, startups raised over $1 billion - up 40% from the same period in 2024. By comparison, in 2015, African startups collectively raised just $200 million.
The leap has been meteoric. Yet, the journey hasn’t been linear. Africa’s startup ecosystem grew rapidly until 2022 when rising inflation, interest rates, and economic uncertainty caused funding to dry up.
Venture capital deals in Africa fell around 52 percent between 2022 and 2024, more than in any other region, according to Pitchbook.
2024 saw only $2.2 billion raised through equity, debt, and grants - a 25% drop from the previous year - highlighting the volatility and risk inherent in emerging markets.
While global market activity cooled in 2023 and 2024, investment flows into Africa’s venture capital landscape remain well above levels seen a decade ago.
Historically, Japan’s engagement in Africa has been largely public-sector-driven: aid, infrastructure projects, and trade facilitation dominated boardroom discussions.
Japanese banks and investment firms rarely considered Africa a viable market, seeing the continent as distant, unfamiliar, and risky due to its diversity of languages, regulatory systems, and cultures.
That is changing. Japanese investors are pivoting from traditional aid and infrastructure funding toward African startups. Early-stage funds like Samurai Incubate Africa and corporate-backed vehicles such as Mobility 54 are now anchoring investments in fintech, healthtech, and mobility, sectors that align closely with Japanese corporate strengths.
Setting aside private equity, infrastructure giants, and development financiers, Japanese investors have poured more than $1.8 billion into disclosed and announced African deals over the past decade. This capital - spanning equity, debt, grants, and hybrid instruments - has largely targeted early- to growth-stage ventures in sectors that dovetail with Japan’s long-term strategic interests, according to a report by UK-Japan Collaboration for Innovation in AFRICA.
This strategy goes beyond short-term financial gains; it’s a deliberate effort to link Africa’s youthful, digital-first economies with Japan’s capital, industrial expertise, and supply chains.
“Since 2015, Japanese investors have backed around 160 African innovators across 190 deals, contributing over $1.8 billion - close to 10% of Africa’s total venture funding in that period,” says Dario Giuliani, Founder and Managing Director at Briter, a business intelligence platform. “While US and European capital still dominate, Japan is emerging as one of the most significant Asian players.”
Why Japanese investors are betting on Africa
Africa offers something Japan’s domestic market cannot: scale, youth, and speed. With 1.4 billion people - most under the age of 25 - substantial mobile penetration, and a consumer spending projection of $2.5 trillion by 2030, the continent is a testing ground for scalable, tech-driven solutions.
Out of ten fast-growing economies in the world, seven are located on the continent. Improving economies, raising income levels, rapid smartphone penetration, etc., are enhancing the attractiveness of the market.
Acknowledging the pivotal role of innovation and technology in Africa’s growth story, Japanese investors have, in recent years, deepened their commitment to nurturing startups at the early stage.
As global markets slowed at the start of the decade, many short-term and first-time overseas funders pulled back, opening up opportunities for Japanese investors to step in and claim a larger role in Africa’s investment landscape.
Kohei Muto, CEO of Japanese VC firm Double Feather Partners, believes population growth, especially urban population growth, is a key opportunity for VC firms like his investing in Africa.
More than 60 Japanese investors are now active in funding African ventures, with a median deal size of around $3.5 million. Their investments span over 30 sectors, underscoring both the breadth of Japanese interest and the growing role of Japan in shaping Africa’s venture capital landscape.
Samir Bhattaharya, Associate Fellow at Observer Research Foundation, a global think tank, explains: “Japan is reframing its approach to Africa, moving away from traditional aid and diving into the continent’s booming startup scene. Through ventures like the Uncovered Monex Africa Investment Partnership (UMAIP), Samurai Incubate Africa, and JICA-backed initiatives, Japan is carving out a bigger role in Africa’s VC landscape - in fast-growing sectors like fintech, climate tech, and mobility.”
Japanese VCs are drawn to startups as engines of growth. Unlike traditional infrastructure projects, startups offer nimble, innovative solutions capable of addressing Africa’s most pressing challenges while opening markets for Japanese corporates.
“Africa combines fast-growing digital markets, a young consumer base, and critical gaps in infrastructure and essential services,” says Dario Giuliani of Briter. “These conditions create opportunities for Japanese VCs to back scalable solutions in areas like payments, logistics, and energy access.”
Beyond chasing financial returns, many Japanese investors view Africa through a strategic lens, using their capital to extend core business operations while creating added value for local founders.
Corporate venture capital and strategic alignment
Corporate venture capital (CVC) arms of firms like Toyota Tsusho, CFAO, Mitsubishi, and Yamaha are not only chasing financial returns but also embedding strategic interests.
For instance, Mobility 54’s investment in Autochek aligns with Toyota Tsusho’s broader goals in mobility infrastructure. Similarly, CFAO leverages logistics tech investments to streamline supply chains across Africa, while Mitsubishi backs healthtech platforms complementing its growing healthcare interests.
Yamaha sees potential in Africa’s urbanization and rising fuel costs, exploring electric two-wheeler ventures in the continent’s mobility landscape.
Samir adds, “Japan’s low-interest-rate environment also enhances the attractiveness of African startups for both equity and debt financing.”
Fintech, healthtech, and mobility
Japanese investments are concentrated in three key sectors: fintech, healthtech, and mobility. Fintech remains the top-funded sector and the main driver of investments in Africa, particularly payments, capturing nearly 30% of disclosed capital across relatively large-ticket deals. Mobile technology has leapfrogged traditional banking infrastructure in sub-Saharan Africa, providing fertile ground for payment solutions and financial inclusion initiatives.
Experts predict the fintech funding momentum to continue, as the competition against traditional banking systems intensifies.
Healthtech follows closely. The sector has attracted over $265 million across 18 deals, including a $190 million medical delivery transaction, reflecting a growing appetite for tech-enabled healthcare solutions.
Mobility, too, is a key focus, with $240 million invested across 13 deals, particularly in asset-heavy ventures like electric vehicles. One notable example is BasiGo, which secured investment from Toyota Tsusho, CFAO, and Mobility 54, signalling the alignment of corporate strategy with venture activity.
Other sectors such as jobtech, cleantech, and logistics form the second tier of Japanese investment.
Clean energy, for example, has drawn $108 million across 12 deals, including Marubeni Corporation’s $26 million backing of Azuri Technologies in Kenya.
While agriculture and agtech are currently smaller in scale, they are ripe for future growth, given Africa’s demographic and resource potential.
Geographic hotspots: Nigeria and Kenya
The bulk of the funding activity takes place in four key centers: Nigeria, South Africa, Kenya, and Egypt. All four nations account for roughly 80% of the total VC funding, both domestic and foreign.
Nigeria and Kenya are the epicenters of Japanese venture activity in Africa, accounting for over half of deals and more than three-quarters of total funding.
Nigeria leads in capital value, primarily driven by fintech deals, and has drawn participation from giants like SoftBank, Toyota Tsusho, and SBI Investment. Kenya presents a more diversified portfolio, including health, logistics, renewables, and mobility. Japanese investors have backed companies such as BasiGo (electric mobility), M-KOPA (asset finance), Bboxx (solar energy), and HAKKI Africa (mobility financing), as per the UK-Japan collaboration for innovation in Africa report.
Outside these markets, Egypt and South Africa see growing, opportunistic engagement. In Egypt, Samurai Incubate Africa and Sunny Side Venture Partners have participated in early-stage deals across healthtech, logistics, and e-commerce. South Africa, while smaller in funding volume, has attracted Japanese investments in mobility and entertainment startups such as WhereIsMyTransport and Carry1st.
The emerging destinations include Ghana, Côte d’Ivoire, Morocco, Tunisia, Rwanda, Algeria, and Senegal.
Beyond capital: Strategic and long-term engagement
Japanese investment in Africa is not just about funding. It’s about transferring expertise, building ecosystems, and creating strategic footholds.
“What makes Japanese VCs different is their combination of financial capital, technology transfer, and ecosystem development,” explains Samir Bhattacharya of Observer Research Foundation. “They are not just funding companies - they are strategically positioning themselves to integrate African technology ecosystems with Japanese corporate networks.”
This approach has a dual lens: financial returns and long-term strategic value. By aligning venture capital with core business lines, Japanese firms are creating mutually beneficial partnerships that embed them deeply into Africa’s industrial and consumer landscape.
Japanese investment in Africa’s startup scene is about far more than just money. The Japanese VC investment in Africa has an unusual feature: it’s mostly dominated by corporate investments, rather than traditional VC firms.
The funder base is strikingly diverse, spanning strategic corporations, traditional VC firms, university-linked funds such as the University of Tokyo Edge Capital (UTEC), and development finance institutions like JICA. Corporates and their venture arms account for 43% of activity, while VC firms contribute 42%.
This diversity reflects a broader strategic dimension. With competition intensifying in Asia, particularly from Chinese investors, Japanese firms see Africa as a relatively open frontier where early movers can define ecosystems.
Investing in startups allows them not only to generate returns but also to forge trade links, embed influence, and build bridges for Japanese companies eager to expand abroad. For corporates, building businesses from the ground up in Africa is often unrealistic. A more effective path to establishing a foothold is through strategic investments in the continent’s fast-growing markets.
Companies like Toyota Tsusho, CFAO, Mitsubishi, and Yamaha are leading the way. For Toyota Tsusho, the Mobility 54 fund has become a vehicle to deepen its footprint in auto-finance and mobility by backing platforms such as Autochek.
CFAO, already one of the largest distributors of mobility solutions in Africa, has leveraged investments in logistics technology to streamline supply chains across the continent.
Mitsubishi has turned to healthtech platforms to complement its growing interests in African healthcare infrastructure.
Yamaha, meanwhile, is actively exploring electric mobility ventures, betting that Africa’s rapid urbanisation and rising fuel costs will make two-wheeler electrification a mass-market reality.
What unites these investments is a dual lens: the pursuit of financial returns alongside the creation of long-term strategic footholds. By aligning venture capital with core business lines - whether in mobility, logistics, or healthcare - Japanese corporations are positioning themselves not merely as financiers, but as long-term partners in Africa’s development journey.
The distribution of Japanese capital underscores this point. Rather than being purely return-seeking, the venture landscape is also driven by commercial partnerships, innovation scouting, and developmental mandates.
For corporates and CVCs, Africa offers a testing ground for new products, entry into fast-growing consumer markets, and alignment with infrastructure or supply chain expansions. For VC firms, it presents the chance to lead deals in high-growth, undercapitalised markets.
Although most Japanese funders still operate from Tokyo, an increasing number are embedding themselves more deeply into Africa’s business environment. Sumitomo Mitsui Banking Corporation, for instance, maintains representative offices in Johannesburg and Cairo, linking its African presence with a regional headquarters in London and wider EMEA operations.
It is also worth noting that a significant share of Japanese capital reaches Africa indirectly. Many investors participate as limited partners (LPs) in Africa-focused funds, providing critical capital that is then deployed by local fund managers.
This approach reflects a growing appetite for co-investing alongside seasoned African partners, enabling Japanese investors to reduce entry risks, build familiarity with the ecosystem, and benefit from on-the-ground expertise.
In practice, this means Japanese investors are as likely to be found anchoring local VC funds as they are leading deals themselves. It is a patient, layered strategy: one that combines financial capital, technology transfer, and ecosystem development to cement long-term ties between Africa’s innovation hubs and Japan’s corporate networks.
Challenges in the African market
Despite the promise, Africa is not without its challenges. Regulations differ across countries, making cross-border expansion complex. Currency volatility can erode returns quickly. Exit opportunities remain limited, with IPO pipelines shallow. Japanese VCs, accustomed to the stable, low-interest-rate environment at home, must adapt to Africa’s dynamic, often unpredictable market conditions.
“The biggest challenges are information gaps, currency volatility, and limited exit precedents,” notes Dario Giuliani. “Many Japanese investors adopt conservative approaches, relying on local partners and DFIs to de-risk investments. Unlike some short-term capital, Japanese firms tend to think in decades, not quarters.”
Looking ahead
Africa’s potential is immense, but success requires patience, local knowledge, and a willingness to embrace complexity. Japanese VCs are playing the long game, focusing on partnerships rather than quick exits, and strategically aligning investments with corporate objectives.
“To become a more prominent player in Africa’s innovation ecosystem, Japan must align its capacity-building initiatives with targeted VC investments, promote patient capital models, and prioritise technology transfer alongside funding,” Observer Research Foundation’s Samir emphasizes. “Deepening local partnerships and leveraging its financial advantages will further solidify Japan’s role in Africa’s startup and innovation landscape.”
The narrative is shifting. Africa is no longer a distant, high-risk frontier. It’s a land of opportunity where innovation meets scale, youth, and dynamism. For Japanese investors, rather than mere financial play, it’s a long-term commitment to shaping Africa’s future while strategically advancing their global industrial footprint.
As startups like Autochek demonstrate, Africa’s entrepreneurial energy is unstoppable. And with Japanese capital, expertise, and strategic partnership, the continent is entering a new era in startup funding.