Not Just Capital: JICA’s Unorthodox DFI Playbook to Develop Africa’s Mid-Market

The hype has faded.

Africa’s startup scene isn't dead, but it’s definitely sobered up. There is still the occasional headline about a seed round or Series A. But if you’re being honest, we’re no longer in that wide-eyed, champagne-popping era where every fintech in Lagos or logistics app in Nairobi seemed like it was one pitch away from a USD 10 M Series A. Those days are behind us.

According to the WT 2024 Report, startup funding across the continent has dropped off a cliff, down by more than 40% in just the first half of 2024. And you can feel it. Conversations with founders aren’t about scaling anymore, they’re about surviving. Investors are more cautious and holding onto their money tightly, pushing for profitability way too early, and the optimism that fuelled the 2020–2021 gold rush has thinned out into caution, if not fatigue.

And to be fair, this was always coming. The cracks were there: fragmented markets, limited purchasing power, tough exits, shallow liquidity. The risk-reward equation started tilting the wrong way. A few big wins were matched by just as many quiet failures. And under it all, the question sharpened: How do you really build sustainable businesses in a market this fragmented, this unpredictable?

But what makes this moment feel different isn’t just the downturn, it’s the realisation that the old way of throwing capital at African ventures and praying for a unicorn just doesn’t work here. Not consistently, anyway.

And while a lot of traditional backers are pulling back with fewer bets, or pivoting, or “re-evaluating” their Africa strategy, one player is quietly staying the course — but on its own terms. No hype. No spray-and-pray funding. Just a strange, careful, long-game approach.

Enter JICA, the Japan International Cooperation Agency, with a model that doesn’t quite fit the typical development finance script.

A script that’s less about throwing capital at problems and more about connecting dots — between Japanese corporates and African startups, between patient capital and sustainable growth, between what’s profitable and what’s transformational.