Add Row 
Add 
The Current Landscape of African Startup Fundraising
African startups are currently in a fundraising frenzy, raising more money than ever before. However, this surge in funding has not translated into substantial returns for investors. This paradox was highlighted during the Pan-African View of Tech Returns and Exits panel at Moonshot by TechCabal 2025. Industry experts like Bankole Cardoso and Esohe Igbinoba discussed the significant structural gaps in liquidity affecting African startups.
Understanding Liquidity Events
Despite the rapid scaling of hundreds of startups across the continent, very few are achieving significant liquidity events, such as IPOs or acquisitions. According to a comparative analysis by Sadaharu Saiki, only 30 exits were recorded across Africa in 2023, a stark contrast to regions like Southeast Asia and Japan, which had far more exits. The lack of accessible exit opportunities hampers the flow of capital that is crucial for the sustainability of the startup ecosystem in Africa.
The Importance of Governance and Financial Discipline
Founders aiming for attractive exits must prioritize governance and financial discipline from the outset. Cardoso emphasizes the necessity of establishing a proper governance structure, which includes setting up advisory boards and maintaining clean financial records. These foundational steps instill trust among potential investors and acquirers, facilitating smoother transactions when exit opportunities arise.
Evolving Deal Structures in African Tech
In response to the stagnant exit environment, startups are increasingly turning to hybrid financing models that mix equity and debt. This adaptation reflects a growing recognition that debt can complement equity in the startup funding mix. Saiki notes that as venture capital becomes scarcer, the strategic use of debt financing may provide a vital lifeline for startups awaiting better market conditions.
A Bright Future Despite Challenges
Looking ahead, the spirit among investors and entrepreneurs remains resilient. The recent minting of unicorns like Moniepoint and TymeBank, despite a decline in overall venture funding, showcases the potential that still exists within Africa’s tech landscape. Lexi Novitske, a managing partner at Norrsken 22, underscores the vast untapped market and the tremendous need for tech solutions addressing local issues—substantially paving the way for future growth.
Preparing for Exit: Strategic Necessities
The need for African startups to focus on exit strategies is not just about finding a buyer or closing a deal; it's intrinsic to the overall business strategy. As outlined in discussions about exit strategies in African startups, founders must maintain operational hygiene, build relationships early, and focus on solving meaningful problems. This strategic foresight—inspired by successful examples like Paystack’s acquisition by Stripe—can position startups favorably when the time comes for them to pursue exits.
Final Reflections and Call to Action
In conclusion, while challenges abound in the African tech startup landscape, the essential lesson is clear: a well-structured approach to governance and exit planning is key. Founders should not overlook these critical components, as they can significantly enhance attractivity to potential investors and acquirers. As the market continues to evolve, stakeholders should remain adaptable and proactive, focusing on creating real, sustainable value.
Write A Comment