Consolidation, AI, Cross-border expansion to define the next phase of African tech

Africa’s technology ecosystem is entering a decisive phase of consolidation in 2026, with mergers and acquisitions (M&A) expected to intensify as startups shift from aggressive expansion to strategic growth, according to multiple industry forecasts and ecosystem reports.

After a record of 67 M&A deals in 2025, which is up 72 per cent year-on-year, 2026 will see even deeper consolidation, particularly in fintech, mobility, logistics, and emerging AI-driven services, as reported by Ecofin Agency.

“This surge signals a definitive shift from a fragmented ecosystem to one defined by strategic consolidation and deeper platform businesses,” TechCabal Insights noted in its State of Tech in Africa report.

Experts describe the trend as a structural reset that favours scale, efficiency, profitability, and regulatory advantage over rapid customer acquisition.

Fintech is projected to remain the epicentre of M&A activity in 2026, driven by the need for regulatory licenses, proprietary data, and infrastructure integration.

Lexi Novitske, partner at Norrsken22, said acquisitions in 2026 will focus heavily on AI tools, microfinance platforms, payments infrastructure, and credit underwriting systems, particularly as fintechs compete to reduce costs and deepen customer engagement.

“Looking ahead to 2026, I expect M&A to continue in major markets. One area will be Al tools that may not yet be commercially viable as standalone businesses, but can be valuable as add-ons that drive internal efficiency and cost reduction for acquirers,” she said in a note.

“I also expect continued consolidation in areas like microfinance and other fintech tools that have become highly competitive, but where acquiring user bases and datasets can still be valuable, particularly for geographic expansion,” Novitske said.

DataPro Limited, has stated that three significant bank mergers are expected by the first quarter of the new year as banks scramble to meet the March 31 recapitalisation deadline set by the Central Bank of Nigeria (CBN).

Given global market volatility. I do not expect international acquirers to be very active in Africa next year (hopefully 20271), as most will be focused on reducing risk,” Novitske added.

Flutterwave’s acquisition of Mono in early 2026, valued between $25 million and $40 million, is widely viewed as a blueprint for future fintech consolidation, enabling faster compliance, identity verification, and financial product rollout.

As investors concentrate on a smaller number of more established startups, younger companies struggling to raise funds are increasingly seeking to be acquired or to merge with better-capitalised firms.

Established players are, however using acquisitions aggressively to enter new markets, secure licences, or consolidate market share.

Kenyan foodtech Twiga Foods acquired three distributors, which are Raisons, Sojpar, and Jumra, to strengthen its supply chain.

Moniepoint, a Nigerian fintech company, also expanded its regional footprint by acquiring Kenya’s Sumac Microfinance Bank and the UK-based electronic money institution Bancom Europe.

Rank, another Nigerian firm, formerly known as Moni, acquired AjoMoney, which provides collective savings, credit, and investment services, and Zazzau Microfinance Bank.

A South African payment infrastructure specialist also acquired competitors ExiPay and Efficacy Payments.

The breakdown by country shows that Africa’s four main tech ecosystems accounted for nearly 75 per cent of all deals. South Africa recorded 16 mergers and acquisitions, Kenya had 14, Egypt had 11, and Nigeria had nine in 2025.

Analysts expect similar deals across Nigeria, Kenya, Egypt, and South Africa, especially as well-funded platforms look to absorb specialised startups to accelerate expansion.

One of the most defining trends expected in 2026 is the emergence of pan-African tech super-conglomerates, built through aggressive cross-border acquisitions.

TechCabal Insights predicts the formation of three to four dominant multi-country platforms that will control large segments of payments, logistics, digital banking, and embedded finance by the end of 2026.

Rather than expanding country-by-country organically, companies are increasingly acquiring licensed local players, bypassing regulatory complexity and accelerating time-to-market.

This shift is expected to reshape competitive dynamics, making regional scale a decisive advantage.

Artificial intelligence and automation tools are forecasted to become major M&A targets in 2026, even where standalone business models remain early-stage.

Analysts say AI startups will increasingly be acquired as internal efficiency engines, enabling fintechs, healthtechs, and logistics platforms to automate compliance, customer service, fraud detection, underwriting, and supply-chain management.

Techmoonshot, in its report titled ‘2026 Predictions for the African Tech Ecosystem,’ predicts that AI-driven efficiency will produce a new generation of ‘centaur companies’ startups generating over $100 million in annual revenue with fewer than 100 employee,s which further fuels acquisition demand for automation technologies. Beyond fintech, climate technology, energy systems, and digital infrastructure are expected to experience accelerated deal activity in 2026.

Startups operating in solar finance, EV mobility, clean-energy distribution, and smart grids are increasingly viewed as strategic assets for fintechs, logistics companies, and telecom operators seeking infrastructure ownership and long-term cost efficiency.

This convergence is expected to produce hybrid tech-energy conglomerates, particularly in Nigeria, Kenya, Egypt, and Ghana.

Despite Africa’s growing tech influence, analysts predict that international acquirers will remain cautious in 2026, focusing mainly on minority stakes, partnerships, and highly strategic buys due to global macroeconomic uncertainty.

However, sovereign-backed investors from the Middle East and Asia are expected to expand participation, especially in AI infrastructure, fintech rails, and cloud computing capacity.

Outlook

The 2026 M&A wave signals Africa’s evolution from a startup-heavy ecosystem into a platform-driven digital economy, where scale, regulation, and infrastructure ownership become central competitive advantages.

With venture funding increasingly selective, M&A is now the primary growth engine for Africa’s most ambitious tech companies.

“We are witnessing the transition from startup experimentation to industrial-scale technology platforms,” TechCabal Insights concluded.

Segun Cole, CEO of Maasai VC, said in 2026, there will be the definitive formation of three to four massive super-conglomerates dominating fintech and logistics across the continent.

He noted that scaled players such as Moniepoint, OPay, and Stitch are no longer just building features, but they are absorbing entire payment rails and identity systems to create an ‘unbreakable’ market share.

“M&A has shifted from being a distress signal to a tool for regional scale. Nigerian companies, in particular, are acquiring East African and CFA zone players to hedge against Naira volatility,” Cole stated.

He noted that acquirers are looking for AI-Ready companies, and any startup that has successfully swapped high-burn junior roles for Vertical AI agents in operations or customer support is seeing a premium on their acquisition multiple.

As consolidation accelerates, 2026 may prove to be the year Africa’s tech ecosystem structurally matures, producing fewer startups but far more powerful continental champions.

Folake Balogun is a tech journalist covering Africa’s fast-growing digital economy with a strong focus on incisive analysis of startup trends, venture capital, and fintech innovation, while also exploring emerging technologies such as artificial intelligence and the future of connectivity by highlighting their economic and social impact.

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