Early-stage but age-old

A Prevalent Chasm Has SA Early-stage Startups Grappling For VC Money

By  |  August 12, 2021

Unlike the not-so-glorious yesteryears, pumping funds into African tech startups has ceased to be the proverbial drop in a bottomless bucket. It was all but quiet a little over a decade ago, but in 2019 the continent’s scorecard on the VC charts reached a billion-dollar tipping point

Courtesy of shamelessly unpopular knowledge, there is however no recounting the rise of the African tech ecosystem without telling countless tales of South Africa.

Even when the noise on the other parts of the region’s startup ecosystem was mostly hushed, South Africa was already aloud with innovation. At many points in history, this country was the headquarters of all things startupping and VC funding in the entire continent. 

Now that there are undeniably fatter and manier cheques going to African startups, it appears South Africa—although not any less innovative than it has been—still struggles with one very local yet persistent problem. 

Among the first countries predictably capable of producing Africa’s first (few) tech startup unicorn(s), South Africa’s seemingly prehistoric technological accomplishments made the nation seem the most likely to do it.

While South African unicorns remain technically nonexistent even after 4 (or 6?) billion-dollar African startups, the country’s tech ecosystem continues to suffer from the longstanding drawback that is the lack of early-stage venture funding amid multimillion-dollar investment slumps.

With African startups having more access to venture investments than ever, the most active VC markets like Nigeria, Egypt and Kenya are supposedly starting to outgrow the spell witching away their chances of securing funding at their earliest stages.

But while the funding voodoo fades, South Africa’s early-stage investment landscape hasn’t been quite able to fill the gorge dug by the very same challenge. 

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