Key Takeaways
- • Enza Capital has raised $21 million at the first close of Enza Capital III LP, its third fund dedicated to AI startups across Africa, equal to 35% of its $60 million target and below its $80 million hard cap.
- • The fund will invest $250,000 to $3 million per company from pre-seed to Series B, with capital reserved for follow-on rounds, across financial services, healthcare, enterprise technology, education, agriculture, climate and infrastructure.
- • Disclosed African AI investment fell by more than 90% between 2025 and the first half of 2026, from at least $170 million across 28 AI startups in 2025 to roughly $16 million in the first six months of 2026, according to Launch Base Africa data.
- • Enza's strategy targets applied AI adapted to local conditions, such as African-language voice systems, small models trained on local data and offline-capable computing, rather than frontier model development.
- • The firm plans a final close in 2027 and begin deploying capital that year, and must raise another $39 million to reach its target and $59 million more to hit the hard cap.
Summary
Pan-African venture firm Enza Capital has raised $21 million at the first close of Enza Capital III LP, a fund focused on AI startups across the continent. The fund targets $60 million with a hard cap of $80 million. Enza, which has offices in Nairobi, Johannesburg and Cairo, expects to secure further commitments before the end of 2026, hold a final close in 2027 and begin deploying capital that year. The fund will invest between $250,000 and $3 million in companies from pre-seed to Series B, with some capital reserved for follow-on rounds.
The launch comes as African AI startups face a difficult funding environment. According to Launch Base Africa data cited in the report, only about 30 deals in 2026 so far carry an explicit AI label, representing roughly one in seven tracked transactions, and account for approximately $93 million in disclosed funding. Healthleap, a clinical AI company, represents 41% of disclosed AI investment, and the five largest deals make up 74% of the total. Disclosed investment fell by more than 90% between 2025 and the first half of 2026, and no large US venture capital firm led an African AI round in the first half of 2026. Local angel networks, impact investors and specialist funds have supplied much of the capital. South Africa, Egypt, Kenya and Nigeria account for approximately 97% of disclosed AI investment on the continent.
Enza co-founder and managing partner Mike Mompi argues that AI can lower the cost of product development, service delivery and customer acquisition in markets constrained by fragmented infrastructure, expensive distribution and skills shortages. The firm does not intend to compete with OpenAI or Anthropic in frontier model development. Instead, it describes a "constraint advantage" and is interested in voice systems that handle African languages and code-switching, smaller models trained on local datasets, and computing systems that function with unreliable connectivity. Banking, healthcare, agriculture and education are cited as sectors where such tools could find customers.
Enza has invested in 11 AI-native companies among its 49 portfolio companies across 10 African countries, and has deployed $58 million across its first two funds. Examples include Aethex AI, which develops local-language models for West Africa, Hakimu AI, a legal technology company training a small language model on unpublished East African Supreme Court filings, and Lua AI, a Y Combinator Fall 2025 participant. The firm was founded in 2019 by Mompi, former Metaswitch chief executive Sir John Lazar and former Farallon Capital partner David Cohen. Its first realised exit came in 2025, when Netcare acquired a controlling stake in Quro Medical, an AI-enabled home-care company that Enza had led in a $1.1 million seed round in 2021. PitchBook values that transaction at $6.77 million. The report notes that one exit is not enough to establish a consistent return profile, and that exits remain a persistent challenge for African venture managers.
Other investors are also preparing AI capital. The Nairobi International Financial Centre is developing a proposed $250 million technology and AI fund, while Romeo Kumalo and Gil Oved plan a $200 million pan-African AI fund. Magda Wierzycka is preparing a fund for South African AI startups, and Egypt's Aria Ventures has launched a $1 million deep-tech fund. Reaching Enza's target will depend on attracting development finance institutions and family offices as limited partners, since specialist AI investments compete with other sectors for capital. The report frames the test ahead as whether portfolio companies can sell locally relevant AI products sustainably, secure growth-stage financing as international venture firms remain cautious, and ultimately generate returns for investors.
The launch comes as African AI startups face a difficult funding environment. According to Launch Base Africa data cited in the report, only about 30 deals in 2026 so far carry an explicit AI label, representing roughly one in seven tracked transactions, and account for approximately $93 million in disclosed funding. Healthleap, a clinical AI company, represents 41% of disclosed AI investment, and the five largest deals make up 74% of the total. Disclosed investment fell by more than 90% between 2025 and the first half of 2026, and no large US venture capital firm led an African AI round in the first half of 2026. Local angel networks, impact investors and specialist funds have supplied much of the capital. South Africa, Egypt, Kenya and Nigeria account for approximately 97% of disclosed AI investment on the continent.
Enza co-founder and managing partner Mike Mompi argues that AI can lower the cost of product development, service delivery and customer acquisition in markets constrained by fragmented infrastructure, expensive distribution and skills shortages. The firm does not intend to compete with OpenAI or Anthropic in frontier model development. Instead, it describes a "constraint advantage" and is interested in voice systems that handle African languages and code-switching, smaller models trained on local datasets, and computing systems that function with unreliable connectivity. Banking, healthcare, agriculture and education are cited as sectors where such tools could find customers.
Enza has invested in 11 AI-native companies among its 49 portfolio companies across 10 African countries, and has deployed $58 million across its first two funds. Examples include Aethex AI, which develops local-language models for West Africa, Hakimu AI, a legal technology company training a small language model on unpublished East African Supreme Court filings, and Lua AI, a Y Combinator Fall 2025 participant. The firm was founded in 2019 by Mompi, former Metaswitch chief executive Sir John Lazar and former Farallon Capital partner David Cohen. Its first realised exit came in 2025, when Netcare acquired a controlling stake in Quro Medical, an AI-enabled home-care company that Enza had led in a $1.1 million seed round in 2021. PitchBook values that transaction at $6.77 million. The report notes that one exit is not enough to establish a consistent return profile, and that exits remain a persistent challenge for African venture managers.
Other investors are also preparing AI capital. The Nairobi International Financial Centre is developing a proposed $250 million technology and AI fund, while Romeo Kumalo and Gil Oved plan a $200 million pan-African AI fund. Magda Wierzycka is preparing a fund for South African AI startups, and Egypt's Aria Ventures has launched a $1 million deep-tech fund. Reaching Enza's target will depend on attracting development finance institutions and family offices as limited partners, since specialist AI investments compete with other sectors for capital. The report frames the test ahead as whether portfolio companies can sell locally relevant AI products sustainably, secure growth-stage financing as international venture firms remain cautious, and ultimately generate returns for investors.
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