Tokyo is redefining its engagement with Africa, transitioning from traditional aid-based approaches to strategic venture capital (VC) investments focused on long-term partnerships, innovation and capacity building. Several Japanese private companies are making Japan’s presence felt in Africa’s VC landscape, particularly in high-growth sectors such as fintech, climate tech and mobility.
Growing demand for innovative, technology-driven solutions in Africa has drawn increasing interest from international investors. VC funding in Africa rose from over US$2 billion in 2019 to a peak of US$5.2 billion in 2022. Though investment declined to around US$3.6 billion in 2023, the continent’s start-up ecosystem has seen remarkable growth in a short period. Yet the VC models employed, mostly derived from the United States and Europe, are often ill-suited to the unique challenges of African markets. These conventional models overlook local contexts, particularly the infrastructural limitations and extended timelines required for start-ups to achieve profitability in Africa.
Amid growing criticism of these conventional VC approaches, Japanese private companies are emerging as a notable actor offering a more context-sensitive model. Realising the potential of its private sector, Japan introduced a transformative vision for its engagement with Africa at the Ninth Tokyo International Conference on African Development (TICAD 9) held in August 2025 under the theme ‘Co-create innovative solutions with Africa’.
The event marked a strategic pivot from a donor–recipient framework to a mutually beneficial private sector-led investment partnership. Japan pledged a US$5.5 billion financial and investment package and US$1.5 billion in impact investment through the Japan International Cooperation Agency. Then-prime minister Shigeru Ishiba also committed to human resources development for 300,000 people in Africa, including 30,000 AI industry personnel, strengthening health and education infrastructure, and promoting trade and private sector collaboration.
Japanese VC firms are slowly but steadily making their presence felt in Africa’s VC landscape. Among the leading Japanese VC firms expanding their footprint in Africa is Samurai Incubate Africa. Active since 2009, it has established nine funds across 10 countries and invested in 248 start-ups, with 112 successful projects. Its investments are concentrated in Kenya, Nigeria and South Africa, with Egypt becoming a new focal point. Samurai Incubate focuses on early-stage ventures across diverse sectors, including fintech, mobility and logistics.
Another significant Japanese presence in the African VC space is Kepple Africa Ventures. In 2022, the firm partnered with Nigeria-based Verod Capital Management to establish Verod-Kepple Africa Ventures. Uncovered Fund is also actively investing in Africa. With a focus on fintech and blockchain, it has already funded 29 start-ups across Africa, including Termii (Nigeria), Gozem (Francophone Africa), Autochek (Nigeria) and Chari (Morocco). Uncovered Fund aims to focus more deeply on high-growth sectors such as financial inclusion and digital infrastructure.
Monex Ventures has also joined the African start-up landscape. After backing Kenyan car finance start-up Hakki Africa and agritech company Degas, Monex Ventures partnered with Uncovered Fund to launch the Uncovered Monex Africa Investment Partnership (UMAIP), a US$20 million early-stage fund. UMAIP plans to issue initial investments between US$100,000 and US$500,000 to up to 30 start-ups, with larger follow-on investments ranging from US$1 million to US$2 million. In addition to equity funding, UMAIP will raise debt in Japan to provide low-interest debt financing, particularly targeting fintech start-ups.
UMAIP is sector-agnostic but prioritises high-potential areas including fintech, mobility, logistics and climate technology. It is especially interested in mobile payment platforms, microlending services, electric vehicle solutions, agritech innovations and carbon credit systems. A unique aspect of UMAIP is its effort to integrate African start-ups into Japan’s corporate ecosystem through partnerships, acquisitions and technology sharing. UMAIP also aims to facilitate Japan’s access to African-generated carbon credits, contributing to Japan’s climate commitments while enabling African start-ups to monetise sustainability efforts.
Besides private VC firms, Japanese government agencies play a catalytic role. The Japanese government has bilateral investment treaties with six African countries — Angola, Cote d’Ivoire, Morocco, Mozambique, Egypt and Kenya — making it easier for private firms to invest in these countries. Japanese companies interested in other African countries commonly rely on the United Arab Emirates or Mauritius, which maintain bilateral investment treaties with African governments.
To ease the investment process for Japanese firms, during TICAD 9, Ishiba proposed the ‘Economic Region Initiative of Indian Ocean–Africa’, but the framework of this initiative has yet to be finalised. The Japanese government also formed the Japan Business Council for Africa, composed of Japanese companies, relevant government ministries and agencies, and government-related organisations.
Japan’s historical absence of significant diasporic communities and limited cultural integration in Africa has contributed to the ineffectiveness of its government investment policies on the continent. To counter this, in 2023, Japan’s Ministry of Economy, Trade and Industry along with the United Nations Development Programme, launched the ‘Meet the Toshikas’ initiative to enhance African start-ups’ visibility and connect them with Japanese investors. The first edition of the programme featured six start-ups across Angola, South Africa and Zambia that participated in a Japanese Investment Roadshow and received US$20,000 catalytic grants.
Despite these advances, several challenges persist. African start-ups continue to struggle with limited access to early-stage funding and investment-readiness programmes. Lack of publicly available market data discourages foreign investors, who often hesitate due to perceived risks and limited exposure. The shortage of capacity-building initiatives prevents many start-ups from reaching the stage where they can attract international investment. Japanese private investors must also contend with these systemic challenges and invest in local knowledge, infrastructure and long-term partnerships.
Still, the approach of Japanese private VC firms shows promise. Unlike many Western investors who are focused narrowly on returns, Japanese VCs and development institutions appear more willing to pursue holistic development outcomes. As demonstrated during the TICAD 9, the Japanese government has also acknowledged the need to assist its private sector. By coupling investment with capacity-building and technology transfer, and adequate policy support from the government, Japanese VCs are positioned to play a significant role in shaping Africa’s innovation economy.
Samir Bhattacharya is Associate Fellow at the Observer Research Foundation in New Delhi, India.
