After a decade of asset-light evangelism, 2026 will mark the return of the steadiness sheet as a aggressive benefit.

Prediction

After a decade of asset-light evangelism, 2026 will mark the return of the steadiness sheet as a aggressive benefit. Startups that personal or finance productive property—automobiles, gadgets, and tools—will outcompete pure marketplaces by controlling provide, monetising financing margins, and unlocking non-public credit score partnerships.

Conventional VC knowledge favoured asset-light fashions for quicker scaling. However the post-2023 funding setting and renewed strain for profitability are pushing founders towards enterprise fashions with sturdy money flows. Productive asset financing—from smartphones and fridges to motorbikes and industrial automobiles—is rising as one of the crucial compelling paths, because it affords predictable money flows, collateral-protected draw back, and a quicker path to realize profitability.

This shift is underpinned by structural asset gaps throughout rising markets. Huge unmet demand exists for mobility, vitality entry, home equipment, logistics capability, and agricultural tools. Asset financing, due to this fact, turns into the product itself, not simply an add-on to a platform. Furthermore, in comparison with developed markets the place such property are plentiful, their relative shortage in rising markets drives larger utilisation and stronger returns—making these fashions intrinsically extra engaging than comparable asset-financing companies in developed economies.

One caveat, although: scale on this context will resemble financial institution loan-book development greater than user-growth curves – and Africa’s banking sector has already demonstrated how giant such steadiness sheets can turn into. Because of this, valuing these companies would require a balance-sheet–led method moderately than conventional revenue-multiple frameworks.

Supporting Proof

2025 has already proven accelerating momentum in debt financing throughout Africa’s startup ecosystem. In Kenya and Egypt, greater than half of complete startup funding now comes by means of debt devices. A number of of the continent’s largest funding rounds this 12 months—together with M-Kopa, Solar King, d.gentle, and Spiro—have been predominantly debt-financed.

This indicators that each founders and capital suppliers have gotten snug with asset-backed enterprise buildings at scale. We additionally see a rising quantity of asset-financing enterprise fashions rising in our funding pipeline—they’re more and more turning into a companion for mobility or logistics platforms, that are in search of anchored provide companions.

Danger Issue

Sudden default charges on account of poorly managed assortment or repossession processes may problem funding confidence in asset financing fashions. Whereas the mannequin is engaging in concept, its success is dependent upon disciplined execution and deep operational experience in credit score underwriting, debt structuring, and danger administration—capabilities that stay scarce in lots of early-stage startups.

Who’s Olivia Gao?

Olivia Gao is a principal at Verod-Kepple Africa Ventures (VKAV), a pan-African enterprise capital agency backing tech-enabled, growth-stage firms throughout the continent. At VKAV, Gao is concerned in sourcing and evaluating funding alternatives, conducting due diligence, and supporting portfolio firms as they scale. Her position spans engagement with founders and serving to form funding technique inside the agency’s broader concentrate on supporting post-revenue startups with world development potential.

Earlier than becoming a member of VKAV, she gained funding expertise as an affiliate and analyst at companies together with SouthBridge Group and Future Hub Africa and labored on renewable vitality and improvement finance initiatives throughout a analysis internship with Local weather Finance Advisors, in addition to with the United Nations Improvement Programme.