While some may paint a bleak picture of the African startup ecosystem, it is, in fact, brimming with potential for growth and alpha. Despite a recent global slowdown in capital flow, this nascent ecosystem offers a promising landscape for investors willing to adopt a long-term perspective and collaborate with local partners.
The opportunities here stem from vast underserved populations who today are effectively non-consumers of goods and services they actually need rather than merely want - and from antifragile entrepreneurs who build life-saving, market-creating innovations. These entrepreneurs harness current economic headwinds to their advantage, building highly resilient companies.
We are seeing an increased formalisation of the informal sector, where startups are transforming offline businesses into traceable and connected participants in the digital economy - just as they are extending the reach of digital services to underserved rural and peri-urban areas. Asset-light models have proven particularly effective. There remains considerable opportunity to capture additional value from fintech.
Ventures Platform investee companies are leading the way. Moniepoint , a standout company in the financial technology space that continues to expand its market share and service offerings. Similarly, Omnibiz has demonstrated growth and profitability through an innovative approach to optimising supply chains and e-commerce. Companies like Sunfi are enabling the transition to renewable energy sources for thousands. Integrating AI and machine learning technology is also unlocking the continents potential to enhance efficiency.
These trends clearly indicate an ecosystem on the brink of significant growth, with a proven track record of returning capital to investors, primarily through secondary sales and strategic acquisitions. Recent high-profile exits, such as InstaDeep , a Tunisian AI startup and Quickets acquisition by Ticketmaster, underscore this trend. These exits, along with earlier successes like Paystack and Wave , demonstrate the African startup ecosystems potential as a lucrative investment destination. Despite being in its early stages, these examples of full and secondary exits highlight the potential for high returns, even if much of the activity remains unrecorded. Ventures Platform , for instance, has successfully returned four out of six investment vintages since 2016 by backing promising companies early in their journey and facilitating primary and secondary exits.
