How African tech firms are deploying AI where it matters most
By Norman Murage
NAIROBI — While venture capital flows to African startups declined 7% in 2024 to KES 416 billion (USD 3.2 billion) according to Partech’s annual report, companies deploying artificial intelligence for development applications are attracting investor attention in a cautious funding environment.
These ventures differ from earlier technology investments that largely replicated Western consumer services. Today’s startups engineer solutions tailored to African infrastructure constraints and regulatory environments, addressing immediate problems: routing delivery vehicles through unmapped settlements, facilitating at-home medical diagnostics where clinics are scarce, and providing personalised tutoring in resource-constrained schools.
The shift comes as African technology companies face increased scrutiny from investors demanding clear paths to profitability and demonstrated revenue growth, according to Kola Aina, founding partner at Ventures Platform, a KES 5.98 billion (USD 46 million) early-stage venture capital firm.
Logistics: optimising delivery without formal addresses
African cities are expanding faster than their addressing systems. In African cities, vast residential areas lack street names or building numbers, complicating logistics from emergency response to commercial delivery.
Leta, a Nairobi-based software-as-a-service provider, operates a platform that optimises lorry routes without requiring formal addresses. The system integrates with enterprise resource planning, point-of-sale, and order management systems to automate dispatch planning and load optimisation.
The company raised KES 650 million (USD 5 million) in seed funding in March 2025, led by European venture capital firm Speedinvest with participation from Google’s Africa Investment Fund and climate-focused fund Equator. This follows a KES 390 million (USD 3 million) pre-seed round in November 2022.
“Traditional logistics software assumes functioning road infrastructure and reliable addresses,” says Nick Joshi, Leta’s founder and chief executive. “Neither assumption holds in most African contexts.”
Since launching in 2021, Leta has scaled from managing 2,000 vehicles to 7,400, moving goods volumes from 20,000 tonnes to 150,000 tonnes. The platform now optimises over 10,000 daily trips across Kenya, Uganda, Nigeria, Zambia, and Zimbabwe, serving clients including KFC, Diageo, and East African Breweries Limited.
Leta’s software reduces average delivery times by 23% and fuel consumption by 18% for participating companies, according to internal performance data. For a company operating 70 lorries, Leta claims monthly savings of approximately KES 3.9 million (USD 30,000).
The business model centres on software licensing rather than asset ownership, a departure from earlier African logistics startups that attempted to own vehicle fleets. Deepali Nangia, who leads Speedinvest’s investments in Africa and the Middle East, says the firm backed Leta because it “leverages logistics as a gateway and fintech as a growth driver, unlocking new business opportunities.”
Leta is testing additional revenue streams, including embedded finance services such as fuel cards and asset financing for vehicles. Google’s investment interest partly stems from Leta’s real-time mapping capabilities, which update more frequently than Google Maps in some African cities where the last comprehensive update occurred in 2022.
Healthcare: extending diagnostic capacity
In Nigeria, where the doctor-to-patient ratio stands at approximately 1:5,000 according to healthcare workforce data, startups are deploying technology to extend medical diagnostic capacity beyond urban centres.
Healthtracka, founded in Lagos in 2021 by Ifeoluwa Dare-Johnson and Victor Amusan, operates a platform enabling at-home laboratory testing. Users order tests through the company’s website, phlebotomists collect samples at their homes, and results appear in their online dashboard within two to three days.
The company raised KES 195 million (USD 1.5 million) in seed funding in June 2022, led by Ingressive Capital and Hustle Fund with participation from FirstCheck Africa and Flying Doctors. The round represented one of the larger investments in a female-led African health technology company, according to venture capital tracking data.
Healthtracka partners with three medical laboratories (vCare Diagnostics, Lancet Laboratories, and Afriglobal Medicare) that provide trained phlebotomists. The startup operates across seven Nigerian cities (Lagos, Abuja, Port Harcourt, Benin, Kaduna, Ilorin, and Ibadan) with a network of 700 phlebotomists.
Since launch, the company has processed approximately 40,000 tests. In 2024, Google selected Healthtracka for its Growth Academy: AI for Health programme, which supports startups applying artificial intelligence to healthcare challenges.
“We have proven that phlebotomy can happen remotely, which is changing the way people think about testing,” Dare-Johnson told development publication Devex in April 2025. The company has introduced an HPV self-sampling kit enabling women to screen for cervical cancer at home, addressing the reality that fewer than 9% of Nigerian women have been screened according to government health data.
Healthtracka generates revenue through per-test fees and is developing an API enabling telemedicine platforms and traditional healthcare providers to offer at-home laboratory testing through its infrastructure. The company reports plans to expand into Kenya and Ghana, though timelines remain subject to capital availability.
The business faces challenges common to African healthcare technology companies: long procurement cycles with government health departments, dependency on consistent electricity supply for cold chain management, and payment collection in markets with limited insurance coverage.
Education: deploying learning companions at national scale
In November 2025, Rwanda’s government announced a partnership with technology training provider ALX and artificial intelligence company Anthropic to deploy Chidi, a learning platform built on Anthropic’s Claude system, across the country’s education system.
The initiative represents one of the continent’s largest deployments of artificial intelligence for education. The Rwandan government plans to train up to 2,000 teachers and civil servants in using the platform, which functions as what developers describe as a “Socratic tutor” (guiding users through questions rather than providing direct answers).
ALX, which reaches over 200,000 students and young professionals across the continent, rolled out Chidi to its learners in early November 2025. Within 48 hours, the platform facilitated over 1,100 conversations and nearly 4,000 learning sessions, with nine out of ten users reporting positive experiences according to programme data.
The deployment model differs from typical commercial technology ventures. Anthropic covers the computational costs for the platform’s operation, ALX provides training infrastructure and implementation support, and the Rwandan government (through its Ministries of Education and ICT) provides policy guidance and institutional access. The government bears no direct financial cost under the partnership structure.
“Rwanda’s Vision 2050 places youth and technology at the core of national progress, and our goal is to build a workforce equipped for the opportunities of the 21st century,” says Paula Ingabire, Rwanda’s Minister of ICT and Innovation. “This collaboration allows us to explore innovative tools that could enhance learning, support educators, and strengthen developer capabilities.”
A joint working group comprising representatives from all three organisations will document insights from the pilot to inform Rwanda’s national policy on artificial intelligence in education and develop potential future adaptations, including versions for schools and localized African language capabilities.
The initiative reflects Rwanda’s broader strategy of positioning itself as a regional technology hub. The country has attracted investments from major technology companies, including BioNTech, which operates a manufacturing facility in Kigali.
Investment patterns: cautious recovery and sector shifts
African technology startups working on development applications raised KES 156 billion (USD 1.2 billion) in 2023, according to Partech Partners data. This figure declined from the 2021 peak but represents stabilisation after corrections in global venture markets.
The broader African technology ecosystem attracted KES 286.4 billion (USD 2.2 billion) in equity funding across 488 deals in 2024, representing a 22.73% decline from 2023 levels. However, the second half of 2024 showed recovery momentum, with funding increasing 24.96% compared to the second half of 2023.
Fintech continues to dominate, securing KES 135.2 billion (USD 1.04 billion) in 2024. However, investor appetite is growing for climate technology, health technology, and artificial intelligence applications addressing local problems, according to venture capital tracking data.
The investment environment has shifted from 2021’s peak. Investors now emphasise demonstrated revenue, clear unit economics, and paths to profitability over growth-at-any-cost models.
“After what happened in the past two years, investors are gradually coming back,” says Ogbonyomi, founder of cloud platform PipeOps. “However, a lot of them have fallen back to the basics, which is, ‘if you want me to invest, what are your numbers like?'”
Seed-stage deals showed a 48% increase year-on-year in Q1 2025, indicating renewed interest in early-stage companies. However, Series A and B deal flow has slowed, with longer fundraising timelines and increased use of extension rounds.
Local African funds and diaspora-backed venture capital firms are becoming more visible in the investment landscape, including Future Africa, LoftyInc, and DFS Lab. This shift towards local capital reduces dependency on international investment cycles, though total available capital remains constrained compared to other global regions.
The acquisition milestone: InstaDeep’s exit
The continent’s largest technology acquisition remains Tunisia-founded InstaDeep’s sale to German pharmaceutical company BioNTech for up to KES 88.66 billion (USD 682 million) in January 2023, completed in July of that year.
InstaDeep, co-founded by Karim Beguir and Zohra Slim in 2014, applies advanced machine learning techniques to enterprise applications across biotech, transportation, electronics manufacturing, and logistics. The company started in Tataouine, Tunisia, with “two laptops, KES 260,000 (USD 2,000), and enthusiasm,” Beguir told TechCrunch.
The company raised over KES 14 billion (USD 108 million) before acquisition, with investors including Google, Deutsche Bahn, and BioNTech. The pharmaceutical company had collaborated with InstaDeep since 2019, launching a joint innovation laboratory in 2020.
During the COVID-19 pandemic, InstaDeep developed an early warning system that could identify potentially dangerous virus variants months ahead of time. The platform analysed thousands of genetic sequences, correctly flagging the 0.3% of variants that proved problematic.
The acquisition added approximately 290 skilled professionals to BioNTech’s workforce. InstaDeep continues to operate as a UK-based subsidiary, providing services to clients beyond biotech whilst focusing on drug discovery applications for its parent company.
“If you’re ambitious, go to Europe or the US and get a job,” Beguir now tells African founders. “But if you’re mega ambitious, stay home and build.”
The exit demonstrated that African technology companies can achieve valuations comparable to global counterparts, though such outcomes remain rare. Most African startups still exit through acquisitions rather than public market listings, limiting liquidity options for early investors.
Regulatory complexity and infrastructure constraints
African markets present regulatory fragmentation absent in more unified jurisdictions. A health technology company operating across East Africa must navigate five separate medical device approval processes, each with distinct requirements and timelines.
Kenya’s regulatory authority processes applications within approximately eight months in some cases, but Nigeria’s equivalent body has taken nearly two years for similar approvals, delaying commercial deployment for companies operating regionally.
Data localisation requirements in countries including Nigeria, South Africa, and Kenya force companies to maintain separate infrastructure in each market, increasing operational costs. The African Continental Free Trade Area agreement includes provisions for regulatory cooperation on digital services, but implementation remains nascent.
Infrastructure constraints compound regulatory challenges. Roughly 35% of healthcare facilities in many African markets lack consistent power supply, requiring companies deploying technology solutions to bundle solar equipment with their software. This increases upfront deployment costs by approximately 40%.
Internet connectivity varies significantly across markets and within countries. Startups deploying cloud-based solutions must design for intermittent connectivity, adding technical complexity and development costs.
Talent acquisition and retention
African universities produce thousands of computer science graduates annually, but few specialise in machine learning or have practical experience deploying these systems in production environments.
Companies report spending six months or longer recruiting qualified machine learning engineers. Some hire from outside Africa and invest in work permit processes, adding time and expense to team building.
Retention proves equally challenging. Engineers with experience in production machine learning systems attract offers from multinational technology companies paying salaries two to three times local startup compensation packages. Equity compensation holds limited appeal in markets with scarce acquisition activity and no established public market exit options.
Some companies are responding with internal training programmes. Lori Systems, a Kenya-based logistics technology company, established an academy that has trained 47 software engineers in logistics optimisation techniques, drawing talent from non-technology backgrounds.
The talent challenge extends beyond technical roles. Companies need professionals who understand both technology implementation and local market dynamics, including regulatory processes, payment infrastructure limitations, and distribution challenges.
Looking forward: measured expectations
The companies demonstrating traction share common characteristics: experienced founding teams combining technical expertise with domain knowledge; partnerships with government agencies or established institutions; revenue models that function at African price points; and pragmatic technology deployment approaches accounting for infrastructure limitations.
Whilst global venture capital firms increased artificial intelligence investments to 30% of total funding in 2024, African startups have not yet experienced a comparable surge. The continent’s share of global venture capital remains below 1%, and artificial intelligence-focused companies represent a small fraction of African technology investment.
McKinsey projects that Africa’s digital economy could exceed KES 23.4 trillion (USD 180 billion) by 2025, with artificial intelligence contributing to that trajectory. However, realising this potential requires sustained investment in education, computational infrastructure, and regulatory frameworks supporting innovation.
For African startups applying artificial intelligence to development challenges, success requires operational execution: navigating procurement processes, managing cash flow through delayed government payments, maintaining service quality during scaling, and retaining talent in competitive labour markets.
The entrepreneurs leading these ventures understand that technology alone addresses no problems. Success demands persistence through bureaucratic delays, willingness to subsidise early deployments demonstrating value, and recognition that transforming sectors proceeds more slowly than venture capital timelines typically accommodate.
Whether this generation of startups achieves sustainable scale will determine not only their investors’ returns but also whether technology can genuinely accelerate progress on health, education, and economic outcomes across the continent.
