African Tech Preps For The Next Wave As Year Of Grit & Grind Unwinds

As 2024 comes to a close, African tech’s resilience and innovation have been put to the test. Amid global funding slowdowns and mounting macroeconomic challenges, startups and investors alike are redefining strategies.

We convened something of a virtual roundtable featuring 12 notable founders and investors from across the continent to share their insights into the year’s lessons and the road ahead. Their perspectives reveal a sector in flux, yet brimming with untapped potential.

Funding Slowdowns: A Double-Edged Sword

The tightening global funding environment dominated discussions, forcing startups to rethink growth strategies and investors to refine deployment tactics.

For Ayo Arikawe, Co-Founder of Thrive Agric which leverages technology to provide profitable support for smallholder farmers across Africa, the slowdown was an opportunity to focus on profitability.

“Startups had to confront tough questions around cash runway and sustainable growth. For us, it meant recalibrating operations to deliver more value with less capital.”

Global venture capital activity slowed in 2024, impacting African startups. However, for many, this was an opportunity to return to basics. Investors share these sentiments. Ashim Egunjobi, Managing Partner at Lagos-based early-stage funder Octerra Capital described funding slowdowns as “a blessing in disguise.”

According to her, “It allows startups and investors to return to fundamentals, focusing on revenue generation and creative ways to extend cash runway.”

Jessica Hope, founder of tech-focused PR firm Wimbart, noted a similar sentiment. “Founders are showing grit and resourcefulness, emphasising strategic storytelling to reach new investor pools. The ability to communicate their vision clearly has never been more important.”

Despite macroeconomic challenges like inflation and reduced purchasing power in major markets such as Nigeria and Egypt, optimism remains. Many stakeholders pointed to the resilience and untapped potential of the continent.

“Africa is still VC-limited compared to markets like India or LatAm,” said Maurizio Caio, Founder and Managing Partner at TLcom Capital which boosted its acclaim as Africa’s largest investor across seed and Series A with the close of its second fund at USD 154 M back in April.

Moreover, fundraising by African-focused investors was one of the main highlights of 2024 with funders such as Partech Africa, Verod-Kepple Africa Ventures and Janngo Capital, in addition to TLcom’s TIDE Africa Fund II, raising over USD 500 M between them. This could make the coming year a very busy one in terms of dealmaking as there’s substantial dry powder seeking ignition.

“Extraordinary entrepreneurs exist across multiple sectors, and the quality of founders often outweighs specific industry trends,” Caio added.

Fintech Still Reigns, but Diversification Emerges

Fintech remained a cornerstone of Africa’s tech ecosystem in 2024, delivering two new African tech unicorns in Moniepoint and Tyme in the final quarter of the year; indeed, 8 of the continent’s 9 tech ventures valued at USD 1 B or more are fintechs.

Cross-border payments, banking-as-a-service, and fintech infrastructure are standing out. Efayomi Carr, a Principal at Flourish Ventures, highlighted the sector’s role in enabling economic activity: “We remain particularly bullish on fintech infrastructure, given its critical role in unlocking broader economic opportunities.”

Founders like Yele Oyekola, who leads Duplo, are addressing inefficiencies in business-to-business payments. “We’re building the infrastructure to streamline payments for businesses, unlocking liquidity and driving growth.”

However, diversification beyond fintech is gaining traction. Dotun Olowoporoku, Managing Partner at prolific early-stage African tech investors Ventures Platform, noted a growing interest in healthcare, logistics, and clean energy. “These sectors address fundamental needs and present opportunities for scalability, even amid challenging conditions,” he said.

Founders in healthtech and agritech tackled structural challenges head-on. Samuel Okwuada of Remedial Health, a startup using technology to streamline healthcare procurement, said, “Access to quality medicines at affordable prices remains a critical issue. By digitizing the pharmaceutical supply chain, we’ve seen growth in trust and efficiency.”

Similarly, Arikawe of Thrive Agric emphasised leveraging technology to boost agriculture. “Our approach to building trust among smallholder farmers has led to record yields and a growing user base.”

Clean energy gained traction in 2024. Rotimi Thomas, CEO of SunFi which offers solar solutions, explained: “We’re solving financing and operational hurdles in solar energy adoption. Africa’s energy gap presents immense opportunities for scalable impact.”

As businesses scaled, security and compliance became a priority. Lanre Ogungbe, founder of compliance and data infra provider Prembly, noted, “With digital adoption accelerating, the need for robust identity verification and fraud prevention solutions is paramount.”

Beyond the Big Four

While Nigeria, Kenya, Egypt, and South Africa continue to dominate, smaller markets are gaining attention.

Olowoporoku introduced Ventures Platform’s “Lake and Ocean Strategy,” which prioritises smaller interconnected markets like Senegal and Ivory Coast. “These ‘Lake markets’ offer unique advantages such as shared currencies and regulatory frameworks, making them ripe for regional dominance,” he explained.

Flourish’s Carr pointed to the MENA region’s evolving regulatory frameworks. “These markets are at an interesting stage, where local innovations and global interest converge to create exciting opportunities,” he observed.

Strategies for Resilience

Africa’s startup ecosystem has weathered the funding drought better than anticipated, avoiding the wave of closures many feared. While some companies have shut down due to fundraising challenges, many are adapting efficiently, laying the groundwork for stronger exits in the next boom period. Consolidation has also come to the fore lately in the form of mergers and acquisitions, including notable ones such as e-commerce heavyweights Wasoko and MaxAB joining forces in a landmark deal.

Macroeconomic hurdles like currency devaluation persist, but the continent’s diverse challenges present ample opportunities for venture capital to deliver transformative returns.

Thus, in the meantime, investors doubled down on operational support and creative funding mechanisms. Olowoporoku of Ventures Platform said, “We’ve designed a ‘Path to Series A Bootcamp’ to help founders navigate funding challenges. Tracking key milestones and connecting them with potential investors is critical.”

Octerra’s Egunjobi highlighted diversification: “We deployed both debt and equity, balancing short- and long-term opportunities. This approach ensures sustainability amid uncertainty.”

Startups, too, adapted. Ola Oyetayo Founder of Verto remarked, “Navigating FX volatility is part of operating in Africa. By building robust currency management systems, we’ve helped businesses mitigate risks.”

Navigating Regulatory Complexities

Fintech and other highly regulated sectors faced increased scrutiny in 2024. Ogungbe of Prembly emphasised the importance of compliance. “Regulatory uncertainty can hinder scalability. Startups that prioritised compliance and leveraged strategic partnerships were better positioned for growth,” he noted.

Uzoma Dozie, Founder of Sparkle, a digital-only microfinance bank in Nigeria, added that navigating regulatory landscapes requires agility. “We’ve focused on building relationships with regulators while ensuring our operations align with evolving standards,” he said.

Investing Smarter: Strategies Amid Uncertainty

Investors are becoming more discerning. Caio of TLcom Capital said, “Africa VC is still young. The quality of the entrepreneur remains the best predictor of returns, regardless of industry.” TLcom’s approach involves evaluating over 100 opportunities monthly but committing to only 4-5 investments annually. Notable in its portfolio are Andela; a unicorn provider of global job placement for software developers, and FairMoney; a Nigerian digital bank.

Egunjobi highlighted Octerra’s use of both equity and debt to create balanced portfolios. “This approach ensures short- and long-term returns, especially in a volatile market,” she explained.

Beyond Capital

Operational support emerged as a key theme in 2024. Carr described Flourish Ventures’ efforts to connect founders with later-stage investors while emphasising mental well-being. “Resilience is critical in challenging environments, and we’re prioritizing holistic support for founders,” he said.

As earlier mentioned, Olowoporoku’s Ventures Platform launched the “Path to Series A Bootcamp,” designed to track key milestones and prepare founders for successful fundraising. “This initiative equips founders with the tools they need to navigate the funding landscape confidently,” he explained.

Lessons from 2024, Outlook for 2025

The consensus among participants was that 2024’s challenges laid the groundwork for smarter, more sustainable growth in 2025. Okwuada of Remedial Health captured this optimism: “The shift to profitability and operational efficiency will create stronger businesses in the long term.”

Caio expects 2025 to be a “time to invest, not exit.” He noted, “With terms favouring investors, we anticipate a selective approach but continued deployment of capital into high-potential startups.”

2024 underscored the importance of capital efficiency, regulatory adaptability, and founder resilience. “We’ve seen startups prioritise compliance and liquidity management, especially in cross-border payments,” noted Carr.

Looking ahead, stakeholders remain cautiously optimistic. “2025 will likely see gradual global recovery,” said Caio. “Africa’s ecosystem will benefit from selective capital deployment and a focus on profitability.”

For founders, the bar is higher. “Understanding investor expectations and showing clear paths to profitability are non-negotiable,” said Egunjobi.

Ogungbe summed up the sentiment succinctly: “African tech remains resilient. The path forward is about adaptability, focus, and leveraging the continent’s unique opportunities.”

As the African tech ecosystem heads into 2025, the focus will be on sustainable growth, strategic innovation, and unlocking the potential of underrepresented markets. The year ahead promises to be another defining chapter in the continent’s tech journey.