Enza Capital has secured a $21 million first close for its third fund, Enza Capital III LP, which will target African AI startups across pre-seed to Series B stages. The fund's hard cap is $80 million, with a target of $60 million, and deployment is slated to begin in 2027.
TL;DR
- Enza Capital's $21M first close for its AI Africa Fund signals investor confidence in African AI despite a sharp 2026 funding slowdown.
- The fund will deploy $250K–$3M per startup, focusing on applied AI in healthcare, finance, agriculture, and education.
- Disclosed AI funding in Africa fell over 90% from 2025 to the first half of 2026, with only $16M raised in six months.
What happened
Enza Capital, a pan-African VC firm with offices in Nairobi, Johannesburg, and Cairo, announced a $21 million first close for Enza Capital III LP, its third fund dedicated to AI startups across the continent. The fund targets $60 million with a hard cap of $80 million, aiming to deploy capital starting in 2027.
Enza Capital III LP will invest between $250,000 and $3 million per company, covering pre-seed to Series B stages, with some capital reserved for follow-on rounds. The fund's focus areas include financial services, healthcare, enterprise technology, education, agriculture, climate, and emerging infrastructure.
The announcement comes as African AI startups face a steep fundraising decline. Disclosed AI funding in Africa dropped by more than 90% between 2025 and the first half of 2026, falling from at least $170 million across 28 deals to approximately $16 million in fewer than 15 deals.
Enza's co-founder and managing partner Mike Mompi argues that AI can reduce product development, service delivery, and customer acquisition costs in African markets, where fragmented infrastructure and limited access to skilled talent constrain commercial activity.
Why it matters
For African AI startups, Enza's fund offers a rare multi-stage capital source at a time when global AI investment is heavily concentrated elsewhere. The fund's focus on applied AI—rather than frontier models—aligns with the practical needs of African businesses and consumers.
Investors and founders should watch whether Enza's portfolio companies can scale revenue in sectors like healthcare and finance, where AI tools must operate under constraints such as unreliable connectivity and multilingual user bases.
The fund's success will also test whether local and specialist investors can sustain momentum in African AI, as large US venture firms have not led any AI funding rounds on the continent in the first half of 2026.
For limited partners, the fund represents a bet on Africa's constraint-driven innovation model, where AI solutions tailored to local conditions may achieve outsized impact compared to generic global models.
Key facts
- Enza Capital III LP has raised $21 million at its first close, representing 35% of its $60 million target.
- The fund's hard cap is $80 million, with deployment expected to begin in 2027.
- Enza Capital III LP will invest $250,000 to $3 million per company, from pre-seed to Series B, with some follow-on capital available.
- Disclosed AI funding in Africa fell over 90% from 2025 ($170M+) to the first half of 2026 ($16M).
- Only about 30 AI-labeled deals have been recorded in Africa in 2026, representing roughly one in seven tracked transactions.
- The median AI funding round in Africa in 2026 is about $1.9 million, compared to an average of $4.5 million.
- Enza Capital has invested in 11 AI-native companies, including Aethex AI, Hakimu AI, and Lua AI (Y Combinator Fall 2025).
- Enza's first exit in 2025 was the acquisition of Quro Medical by South African hospital group Netcare, valuing the AI-enabled healthcare company at $6.77 million.
Context
African AI investment remains highly concentrated, with South Africa, Egypt, Kenya, and Nigeria accounting for about 97% of disclosed AI funding on the continent. This reflects the advantages of larger tech ecosystems and established investor networks in these markets.
Most funded African AI companies apply the technology within existing sectors, such as healthcare records, banking, customer service, education, and agriculture, rather than developing general-purpose models.
Other funds preparing to enter the space include a proposed $250 million technology and AI fund from the Nairobi International Financial Centre and a $200 million pan-African AI fund led by former Vodacom executive Romeo Kumalo and Gil Oved.