Venture capital firm Enza Capital has raised $21 million in the first close of its third fund, dedicated entirely to artificial intelligence in Africa, according to Launch Base Africa. Announced in early November without a figure, the vehicle is targeting $60 million. The bet runs against the trend: according to the same outlet’s tracking, reported funding for African AI start-ups has collapsed since 2025.
A fund announced without a figure, then clarified
When it was announced on 2 November, the size of the fund was not disclosed, Dealroom noted, leaving its real weight unclear. On 11 November, Launch Base Africa provided the figures: a first close of $21 million, or 35% of a $60 million target, with a hard cap set at $80 million. Further commitments are expected before the end of 2026, and both the final close and the first investments are planned for 2027.
Initial tickets will range from $250,000 to $3 million, from pre-seed to Series B, with reserves for follow-on investments. Target sectors include financial services, health, enterprise software, education, agriculture, climate and infrastructure. Enza operates from Nairobi, Johannesburg and Cairo. Launch Base Africa does not name the fund’s investors.
No large models, but AI tailored to local conditions
Enza will not fund labs building frontier models. According to startups/">Empower Africa, the fund is looking for technologies designed for the continent’s languages, data, customers and infrastructure. Selected companies will need a defensible advantage: proprietary data, established customer relationships or software embedded in users’ daily work. Co-founder Mike Mompi stresses profitability, explaining that net margin and cash flow matter even more than gross margin.
This caution has a concrete reason: the cost of inference, meaning the computing required for each AI request, can eat into margins, Dealroom notes. Enza is betting on what it calls, according to Launch Base Africa, the “constraint advantage”: voice tools for Pidgin or for conversations that mix languages, small locally trained models, and computing adapted to weak connections. Companies already backed include Aethex AI, which builds local-language models for West Africa, Hakimu AI, a legal tool for East African courts, and Lua AI, a Y Combinator alumnus.
An African AI market that has contracted
The context makes the initiative unusual. According to Launch Base Africa’s count, some thirty deals explicitly linked to AI were recorded in 2026, roughly one in seven, for some $93 million. The reported median round is around $1.9 million. Concentration is extreme: Healthleap’s raise alone accounts for 41% of the total, and the top five deals for 74%.
The decline is sharp: at least 28 AI start-ups had raised at least $170 million in 2025, compared with about $16 million reported in the first half of 2026, according to the same outlet. Dealroom, citing Semafor, says that AI-native companies captured less than 2% of the $1.36 billion raised by African start-ups in the first half. South Africa, Egypt, Kenya and Nigeria account for about 97% of reported AI funding, according to Launch Base Africa.
What remains to be proven
Founded in 2019 by Mike Mompi, Sir John Lazar, former head of Metaswitch, and David Cohen, Enza raised $58 million across its first two funds. Sources differ on the portfolio: 47 companies in nine countries according to Dealroom and Empower Africa, 49 in ten countries according to Launch Base Africa. Eleven are presented as AI-native, and a twelfth deal is in preparation. The first exit came in 2025, with Netcare’s takeover of Quro Medical.
Enza is not alone in this niche. Launch Base Africa cites a $250 million fund being considered by the Nairobi International Financial Centre and a $200 million pan-African fund planned by Romeo Kumalo and Gil Oved, both still at the project stage. The real unknown is the final close: will backers, often development finance institutions and family offices, accept a specialised strategy at a time when seed capital is becoming scarce?
Frequently asked questions
How big is Enza Capital’s AI fund?
According to Launch Base Africa, $21 million was raised at the first close, against a target of $60 million and a hard cap of $80 million. The amount had not been disclosed in the initial announcement.
Which start-ups can apply to this fund?
African companies applying AI to a concrete sector, from pre-seed to Series B, with initial tickets of $250,000 to $3 million. Developers of frontier models are not targeted.
When will the fund start investing?
The first investments and the final close are expected in 2027, according to Launch Base Africa.
Sources
- Enza Capital launches dedicated Africa AI fund, builds on $58M portfolio — Dealroom, 2026-11-02
- Enza Capital launches dedicated fund for African AI startups — Empower Africa, 2026-11-03
- Enza Capital Raises $21M to Back African AI as Venture Funding Retreats — Launch Base Africa, 2026-11-11