Angel investors remain a cornerstone of funding for Nigerian startups, holding their ground despite the allure of venture capital (VC). A newly released report by startup-focused law practice TLP Advisory, “A Decade of the Nigerian Venture Ecosystem: Numbers, Insights & Stories,” reveals that 43% of Nigerian startups received their funding from angel investors, including friends and family, over the past decade.

This figure overshadows the 24% of startups funded by VCs and the 18% and 15% that secured funds through debt financing and grants, respectively.

The report, marking TLP Advisory’s 10th anniversary, paints a detailed picture of Nigeria’s tech ecosystem. It highlights its remarkable growth, systemic challenges, and the critical role of early-stage investors in sustaining the sector through turbulent times.

While VC funding brought a sense of scale and visibility to the ecosystem, angel investors have quietly remained the backbone, the report reveals, providing vital support during the industry’s lean periods.

Funding Challenges and the Angel Investor Advantage

The data is telling: Nigerian startups have faced significant funding challenges in recent years, particularly as global VC interest waned.

After a record USD 1.75 B raised in 2021, funding plummeted to USD 500 M in 2023. Startups often cite limited access to finance as a chief hurdle, with 22% pointing to it as their primary barrier to growth, ahead of inadequate marketing (18%) and revenue model challenges (15%). Additionally, 51% of startups surveyed cited difficulties in securing funding, primarily due to currency volatility and access to investors

“People who raised money in U.S. dollars, who are earning in Naira, and who have to report to investors who invested in US dollars, need to be doing almost three times more work because the currency has devalued by more than 70%,” said Femi Longe, Co-founder of CcHUB, a tech incubator that rose to prominence in Lagos before expanding to other African cities, notably co-built by Nigeria’s current tech minister, Bosun Tijani.

The volatile funding landscape has forced many startups to rely on angel investors, who not only bring capital but also mentorship, introductions to key networks, and early confidence that often catalyses further funding. Odunayo Eweniyi, co-founder of PiggyVest, credited well-known angel investor Olumide Soyombo for his support, saying, “He introduced us to the right people and allowed us to build an ecosystem around ourselves.”

While VC funding often grabs headlines, its availability has been inconsistent. A key reason is the shift in global interest rates and investor attention from emerging markets to more stable economies. “Zero interest rates and global interest have moved away from developing markets into more established markets,” noted Tomiwa Aladekomo, CEO of Big Cabal Media.

This trend has led to a slowdown in early-stage VC investments. From mid-2022, TLP Advisory observed a shift toward Series A and M&A transactions, with fewer pre-seed and seed rounds taking place. The reduced capital availability has forced startups to adapt, with some pivoting to strategic partnerships or alternative funding sources like grants and debt financing.

Talent, Regulations, and the Battle for Survival

Funding isn’t the only challenge Nigerian startups face. Talent acquisition and retention remain significant obstacles. Many founders struggle to find skilled employees who align with their business needs. Similarly, regulatory bottlenecks, cited by 30% of surveyed founders, continue to impede growth.

Founded in 2014, TLP Advisory, with offices in Lagos, London, and New York, says it has guided over 250 Nigerian tech clients through deals spanning investments, M&A, intellectual property, and expansion strategies. As one of two firms behind the 2023 Nigerian Startup Act, TLP helped shape policies supporting startups and has aided over 200,000 businesses, bolstering Nigeria’s economic growth.

The Nigeria Startup Act, co-drafted by TLP Advisory, was a major milestone designed to address some of the challenges by fostering collaboration between startups and regulators. However, many founders believe more needs to be done to create a truly enabling environment.

Eghosa Omogui, Founder of Echo VC, highlighted another persistent issue: the unreliability of funding commitments, noting one such high-profile case that became public last year. “We were pre-seed investors at a company called MarketForce before they got into YC. They announced a USD 40 M raise, but USD 8 M never showed up. That happens more often than people think.”

Despite these hurdles, the Nigerian startup ecosystem continues to show resilience and growth potential. The TLP Advisory report notes that 76% of startups reported growth in revenue, cash flow, or customer base over the past decade. Additionally, 47.5% experienced annual growth rates between 11-40%, while 26% achieved over 40%.

This optimism is also reflected in the ecosystem’s dynamism, with 26% of the surveyed companies established in the past two years. These new entrants indicate sustained interest and confidence in Nigeria’s tech sector, despite macroeconomic challenges.

What Lies Ahead?

The report calls for a renewed focus on strategic partnerships, talent development, and policy engagement. Startups are encouraged to leverage alternative funding sources while pushing for regulatory reforms that create a more supportive business environment.

While venture capital remains an important player, angel investors have proven indispensable in navigating the ecosystem’s ups and downs. Their role in providing early-stage funding and mentorship underscores the importance of a diversified funding landscape for Nigerian startups.

As Odunoluwa Longe, Co-Founder of TLP Advisory, aptly put it, “Despite the current tough macroeconomic climes, engaging with participants in this project ignited in me renewed hope and optimism for our ecosystem.”

In a landscape marked by volatility, it is this hope—and the enduring support of angel investors—that may hold the key to unlocking the next chapter of Nigeria’s startup success story.

With Africa’s population projected to double by 2050, the continent is poised to birth a billion new lives. Yet, economic constraints mean the majority of this booming demographic risks becoming non-consumers—people unable to access or afford goods and services they need, let alone want.

At the recent Africa Prosperity Summit, hosted by early-stage VC fund Ventures Platform in Lagos, this challenge took centre stage, prompting investors and thought leaders to discuss how to transform Africa’s untapped potential into tangible economic growth.

Kola Aina, Founding Partner of Ventures Platform, set the tone with a concerning warning. “Africa’s massive population boom is happening at the same time global venture capital is on a decline. Since the post-COVID peak of venture capital investments in 2021— influenced by the ZIRP (Zero Interest Rate Policy) era—global venture capital flows have declined by 70%. Africa has experienced a 67% decline, despite requiring 10x more capital to address infrastructure gaps and non-consumption.”

Africa’s current infrastructure and investment levels are ill-equipped to meet the needs of its growing population. Non-consumption—the inability to access goods and services—is the key issue. Without intervention, the one billion Africans expected by 2050 could remain outside the economic fold, posing risks to regional stability and global progress.

In a subsequent Q&A session, Aina, the Convener of the Africa Prosperity Summit, hosted Haresh Aswani, Managing Director – Africa of Tolaram Group, notable for its dominant position in the Nigerian FMCG market. Aswani shared insights into how Tolaram has successfully transformed Africa’s non-consuming population into active consumers, detailing the group’s strategic approach to market dominance, noting the opportunity and challenge are immense.

This sentiment echoed throughout the Summit, which convened over 150 global investors, development finance institutions, family offices, and venture capitalists.

Is VC the Ultimate Catalyst?

Venture capital (VC) holds a unique position in addressing non-consumption. Unlike private equity or bonds, VC is designed to shoulder high risks, making it ideal for emerging markets. Efosa Ojomo, Director of Global Prosperity at the Clayton Christensen Institute, highlighted this during his keynote.

“Venture capital is designed to de-risk an economy—or at least, a sector. In Africa, where raising funds for critical infrastructure is particularly challenging, venture capital must go beyond funding to actively build entrepreneurial ecosystems,” Ojomo emphasised. He painted a picture of VC not just as a financial instrument, but as a force capable of jumpstarting entire markets, creating jobs, and empowering millions.

The Summit’s theme, “Funding the Next Billion: Africa’s VC Investment Landscape in a Post-ZIRP Era,” reflects the shifting global economic landscape. The era of near-zero interest rates, which fueled record VC investments worldwide, has ended. Rising rates have tightened global capital flows, leaving Africa in a precarious position.

“Africa needs 10 times more capital just to match Asia’s levels of VC investment,” Aina remarked. Yet, global interest in African markets is growing, driven by its young, entrepreneurial population and untapped potential. For investors, the challenge is aligning expectations with the unique realities of the continent.

Charlie Robertson, Head of Macro-strategy at FIM Partners, brought a macroeconomic lens to the discussion. Comparing Africa’s trajectory to other regions, he outlined how education, industrialisation, and investment can unlock prosperity. However, he cautioned against underestimating the complexities. “As Africa charts its path to prosperity, the critical levers of education, investment, and industrialisation must be synchronised to deliver sustainable growth,” Robertson said.

Speakers repeatedly stressed the need for tailored solutions that address local contexts. Standardised global strategies often fail in Africa, where infrastructure gaps and regulatory hurdles are significant. Stakeholders pointed out that successful ventures must prioritise affordability and accessibility.

Turning Insights into Action

As the Summit concluded, Aina challenged attendees to translate dialogue into action. “At Ventures Platform, we believe that by investing in the right kinds of entrepreneurship and innovation, we can produce two powerful outcomes—high-quality jobs that will drive up incomes across Africa, and scaling up affordability and accessibility to products/services for millions of people across the continent.”

This dual approach, focusing on job creation and market accessibility, offers a pathway to solving non-consumption. It requires collaboration between local entrepreneurs, global investors, and policymakers.

The Africa Prosperity Summit highlighted both the enormity of the task and the opportunities within reach. For investors, the post-ZIRP reality may demand a recalibration of expectations, but it also opens the door to new strategies. For Africa, the stakes could not be higher. Bridging the gap between non-consumption and active participation in the economy is imperative.

In any case, stakeholders at the Summit reckon that the real question is not whether Africa has potential, but whether we are willing to commit to unlocking it.

Swvl, the Cairo-born, Dubai-based mobility startup that once lit up the Burj Khalifa in red to celebrate its billion-dollar valuation as a mobility disruptor, recently announced USD 4.2 M in new contracts across Egypt in sectors like FMCG, telecom, e-commerce, and banking. These deals, touted as a testament to the company’s capacity for innovation in transportation solutions, include offerings such as shift-based employee transit and AI-driven commute optimisation for students.

Yet, beneath this optimistic announcement lies a more sobering reality: Swvl is fighting to maintain relevance and solvency amid an increasingly precarious financial and operational landscape.

While CEO Mostafa Kandil calls the contracts a “testament to Swvl’s ability to deliver transformative solutions,” broader questions about the company’s sustainability remain unanswered. Mounting legal challenges, delayed financial reports, and persistent operational hurdles paint a picture of a company scrambling for gains amid fears of grinding to a halt.

Swvl’s rise to prominence was as dramatic as its subsequent struggles. Founded in Egypt, the company rapidly gained attention for its tech-driven approach to mass transit, securing a USD 1.5 B valuation upon its Nasdaq debut in 2022. However, its stock has plummeted from a USD 10.00 IPO price to less than a dollar at one point in 2023 (currently trading at USD 4.79), following allegations of financial instability and operational mismanagement.

A damning report by activist short-biased activist Wolfpack Research in September alleged that Swvl was teetering on the edge of bankruptcy, pointing to dwindling cash reserves of USD 2.9 M and widespread service disruptions in its Cairo operations. The report triggered a 43.62% drop in Swvl’s stock, depleting what little investor confidence remains. Adding to its woes, U.S. law firm Pomerantz LLP launched an investigation into potential securities fraud, further undermining trust in the once-promising company.

The Shifting Sands of Strategy

Swvl’s current strategy leans heavily on B2B contracts and geographic expansion, particularly in Saudi Arabia. The company reported a sixfold increase in gross profits from its Saudi operations in 2024, fueled by USD 2.6 M in annual contract value from industries like education, healthcare, and food services. Its AI-powered platform, enabling real-time monitoring and route optimization, has found traction in managing student commutes and workforce mobility.

However, these gains are yet to offset Swvl’s broader struggles, especially in its home market of Egypt. Macroeconomic pressures, including a 40% devaluation of the Egyptian pound and surging inflation, continue to strain its cash flows. Meanwhile, the offloading of its European and Latin American operations in 2023, intended to streamline its business, provided only short-term financial relief.

Fighting Legal, Financial, and Operational Battles

Swvl’s financial disclosures, or the lack thereof, have further fueled scepticism. The company has not filed detailed earnings for 2024, leaving investors in the dark about its performance. While Swvl managed to report a net profit of USD 3.1 M in 2023—largely due to one-off debt settlements—it still incurred USD 8.2 M in losses from subsidiary sales. These figures underscore the fragility of its profitability.

Adding to its woes, Swvl faces delisting threats from Nasdaq for repeated compliance failures. It narrowly avoided delisting last year after its share price traded below USD 1.00 for 30 consecutive days.

Operationally, Swvl’s consumer services have taken a significant hit. Once the backbone of its revenue model, consumer offerings like Daily and Travel have been quietly removed from its website. While Kandil denies their closure, their absence signals a pivot away from the consumer market, where competition from ride-hailing giants and public transit systems proved too intense.

A Glimmer of Hope or a Mirage?

The recent USD 4.2 M in Egyptian contracts and a strategic five-year deal with e& Egypt, valued at USD 6.3 M, provide a glimmer of hope for Swvl. These partnerships highlight the company’s ability to adapt to the complex demands of B2B transportation solutions. However, analysts remain cautious, noting that Swvl’s reliance on contract wins and cost-cutting measures may not be enough to address its structural challenges.

“These contracts reflect Swvl’s potential,” Kandil has emphasised, but potential alone will not resolve its pressing financial and legal hurdles. With its U.S. expansion plans set for 2025 and strategic capital-raising efforts in its plans, Swvl’s ability to stabilise its operations in the coming months will be critical—not just for its survival but for the broader credibility of the transportation-as-a-service sector in emerging markets.

However, the company would be wary of over-committing as its rapid expansion into new markets, bolstered by acquisitions of companies like Shotl and Viapool, stretched its resources thin.

While its pivot to B2B and government partnerships reflects a pragmatic shift, the clock stays ticking for Swvl. Whether it can transform this period of crisis into an opportunity for reinvention remains to be seen.

Nigeria, often regarded as the main character of Africa’s economic and tech aspirations, is proving to be a double-edged sword for global companies betting on its promise.

The latest casualty is dLocal, the Uruguay-based payments unicorn, whose third-quarter 2024 earnings reveal an over 80% year-over-year revenue loss in Nigeria, driven largely by economic headwinds in its once-prized Nigerian market.

This decline underscores the harsh reality facing foreign tech firms in Nigeria: the promise of a vast, youthful, and digitally inclined population is being undermined by relentless currency volatility, crippling inflation, and operational challenges.

Nigeria’s potential has always been irresistible for for global companies such as dLocal, which is among a growing contingent of prominent Latin American fintech companies making inroads into African markets of late. Yet, the country is also proving a headache.

While the fintech sees strong performance in Egypt and South Africa, the Nigeria unit, once touted as a growth engine for dLocal’s African operations, saw its Q3 2024 revenues plunge to USD 2.1 M—just 1% of the company’s total—down from USD 55 M in the first nine months of 2023. This steep decline, despite steady transaction volumes, stems from the naira’s devaluation, which has sharply eroded purchasing power and the value of processed payments.

The financial pressures highlight the difficulties of doing business in a country where exchange rates have spiralled out of control, making profitability elusive for even seasoned operators.

Across sectors, foreign firms are grappling with the same fundamental challenges. This week, South Africa’s MTN Group, Africa’s telecom behemoth, revealed in its financials that its Nigerian revenue dropped 48.7% in Q3, driven largely by the naira’s devaluation, which reached NGN 1,541 to the USD by the end of the quarter. For MTN, this translated into a staggering USD 414.7 M loss in H1 2024, the company’s first since a billion-dollar regulatory fine eight years ago.

MultiChoice Group, Africa’s leading pay-TV provider, has also felt the sting. The company reported losing 243,000 Nigerian subscribers in six months, citing reduced consumer spending power amid inflationary pressures. The naira’s devaluation drained approximately ZAR 7 B (~USD 318.2 M) from MultiChoice’s trading profits over the last 18 months. Plus, the company was forced to write off USD 21 M of cash held in Nigeria with Heritage Bank whose license was revoked in June 2024 and has entered liquidation.

Meanwhile, cryptocurrency firms like Binance and OKX have been forced to scale back in the face of regulatory crackdowns and a deteriorating business environment. Binance’s CEO recently disclosed that Nigerian authorities demanded bribes to drop money laundering charges—highlighting operational challenges in the region.

Despite these headwinds, some companies are finding ways to adapt. dLocal continues to invest in its payment infrastructure, aiming to stabilise its Nigerian operations. Similarly, MTN has leaned heavily on its fintech arm to offset the decline in voice and data revenues. The telecom giant reported an 8.5% growth in fintech revenue in Q3, with transaction volumes surging by 17.4% to nearly 15 billion transactions.

MultiChoice, on the other hand, is aggressively diversifying. Its rebranded streaming platform Showmax saw 30% growth in paying subscribers, while its fintech venture, Moment, now processes 30% of the group’s payments, showcasing the company’s pivot to financial services.

“MultiChoice has felt the direct weight of this volatility,” CEO Calvo Mawela remarked, as the company continues to expand beyond its traditional pay-TV business.

For dLocal and others, the Nigerian market remains a paradox: rich with opportunity but fraught with risk. With over 200 million people, growing internet penetration, and a youthful demographic, the potential is undeniable. However, companies have to contend with deep structural challenges, including unpredictable regulatory frameworks, high inflation, and significant foreign exchange volatility.

While the challenges are immense, so is the potential upside. But as dLocal’s latest results starkly illustrate, foreign tech firms in Nigeria are now facing a sobering reality: thriving in this market requires more than ambition.

Featured Image Credits: KPA

MTN Group, Africa’s largest telecoms operator, continues to feel the sting of economic instability in its key Nigerian market, driving down its third-quarter 2024 revenue by a sharp 18.5%. The Johannesburg-listed giant, once a beacon of steady growth in African telecommunications, is now navigating a precarious landscape shaped by severe currency devaluation and a plummeting voice revenue segment.

In its latest earnings report, MTN disclosed that group service revenue dropped to ZAR 127.4 B (USD 6.99 B) from ZAR 156.3 B in Q3 2023, marking a substantial year-on-year contraction. Nigeria, traditionally MTN’s largest revenue driver, reported an extraordinary 48.7% plunge in revenue for Q3 alone. The culprit? The steep devaluation of the naira, which closed the quarter at NGN 1,541 to the dollar, down from NGN 907 at the end of last year.

“The naira continued to depreciate, closing the period at N1,541/USD,” noted MTN Group President and CEO Ralph Mupita, explaining that while the currency was less volatile sequentially in Q3, the devaluation has had “a material impact on our reported results.”

The macroeconomic strain in Nigeria has reverberated through MTN’s financials. Just last quarter, MTN’s group service revenue saw a 20.8% year-on-year decline, largely due to a 52.9% slump in Nigerian revenue—a massive blow for a company with 288 million subscribers across 17 African markets. This dip had driven MTN to a USD 414.7 M loss in the first half of 2024, its first reported loss since it faced a billion-dollar fine from Nigerian regulators eight years ago.

The Nigerian market remains MTN’s Achilles’ heel, with currency depreciation and regulatory hurdles eroding what had long been a stronghold for the telecom giant.

The impact on MTN’s core telecommunications business is especially visible in voice services, which experienced a staggering 31.3% drop in revenue for Q3. Meanwhile, data revenue decreased by 15.3%, highlighting the broader challenges facing MTN as traditional services come under pressure from adverse economic conditions across the continent. Notably, MTN South Africa and Uganda bucked the trend with marginal revenue gains of 3.3% and 5%, respectively, as both countries benefited from more stable currencies.

Yet, amid these struggles, MTN’s fintech arm is showing signs of resilience, even providing a partial lifeline. Fintech revenue grew by 8.5% in Q3, with transaction volumes up 17.4%, reaching nearly 15 billion transactions. Mupita pointed to MTN’s strategic focus on advanced financial services, noting that the company achieved a 53.1% jump in advanced services revenue in Q3, with fintech now operating within a high EBITDA margin range of mid- to high-30%, despite the overall volatility.

MTN’s fintech growth aligns with the company’s strategic pivot as it looks to offset declines in traditional telecom services. Monthly active Mobile Money (MoMo) users increased by 5.7%, reaching 61.5 million, while data traffic surged 34.1%, reinforcing the potential of digital financial services to sustain MTN’s revenue base.

“Fintech transaction volumes continue to rise, supporting our growth thesis and underpinning MTN’s resilience,” Mupita said, pointing out that MTN’s strategy is to continue expanding digital and financial services across its markets.

While MTN’s South African market posted a modest 3.3% revenue increase in Q3, and MTN Uganda and Ghana posted growth rates of 20.1% and 31.9%, respectively, the overall business impact of Nigeria’s economic decline remains severe. Excluding the conflict-hit Sudanese market, MTN reported a 14% growth rate, aligning with its mid-teen growth targets. However, inflation, foreign exchange volatility, and regulatory pressures, especially in Nigeria, continue to weigh on the company’s long-term outlook.

Amid these financial strains, Mupita sees a silver lining. “Blended inflation across our footprint eased to an average 13.9%, compared to 17.1% in the same period of 2023,” he said, noting that reduced currency volatility in Q3 signalled a slight stabilisation across key markets. But whether these tentative improvements will be enough to counterbalance the ongoing pressures in Nigeria remains uncertain.

For MTN, the path forward will likely depend on its ability to further insulate the business from currency fluctuations and diversify revenue streams, leveraging its fintech momentum and broader digital services to combat macroeconomic headwinds.

Africa’s leading pay-TV provider, MultiChoice Group, is battling a formidable challenge: A shifting landscape where subscribers are dropping, economic headwinds are battering earnings, and competition is rising from digital and streaming options.

Facing these pressures, MultiChoice is doubling down on newer revenue streams to redefine its future beyond traditional pay-TV. However, this shift is proving to be a costly venture, both financially and operationally, and the stakes have never been higher as Canal+ eyes a full takeover of the company.

MultiChoice’s traditional pay-TV model, established with its popular DStv and GOtv services, has shown signs of strain over the past year, with subscriptions steadily declining. The group reported an 11% year-over-year drop in its subscriber base in its latest financials released Tuesday, with 1.8 million customers leaving by the end of September 2024.

While the South African market was relatively resilient, losing only 5% of its base, the Rest of Africa business fared far worse, particularly in Nigeria and Zambia. Nigeria’s ongoing economic crisis—with inflation above 30% for the better part of the year—has hit consumer spending hard, exacerbating MultiChoice’s struggle to retain subscribers.

Overall, MultiChoice’s subscriber base declined by 11% or 1.8 million subscribers to 14.9 million active subscribers in the last 12 months; a 5% decline (0.8 million) in 1H FY25 and a 6% decline reported (1 million) in 2H FY24.

In Zambia, where drought-driven power outages have disrupted service, MultiChoice lost 298,000 subscribers in just six months. Nigeria also shed 243,000 subscribers in the same period, and the revenue impacts from these declines were further compounded by foreign exchange volatility.

“MultiChoice has felt the direct weight of this volatility,” the company noted, estimating that currency depreciation alone has drained roughly ZAR 7 B (~USD 318.2 M) in trading profit over the past 18 months.

Betting on New Revenue Streams

To mitigate its dependence on traditional pay-TV, MultiChoice is moving fast to diversify. Showmax, its subscription video-on-demand (SVOD) platform, has seen strong growth, reporting a 30% increase in paying subscribers. Following a rebranding and migration to the Peacock technology stack, Showmax now benefits from partnerships with distribution giants like M-PESA in Kenya and Capitec in South Africa, which has helped drive uptake.

Beyond streaming, MultiChoice is expanding its footprint in the insurance and financial services space. Through a partnership with Sanlam, MultiChoice is finalising a deal expected to yield a ZAR 2.6 B (~USD 144.4 M) to ZAR 3.3 B (~USD 182.9 M) accounting gain.

Additionally, the company’s sports betting business continued to gain strong momentum in Nigeria, where BetKing Nigeria has secured the second position in the online betting market.

This is in spite of a tough macroeconomic and foreign exchange environment, with net gaming revenue falling 48% to USD 48.3 M due to a weaker naira but increasing 10% organically. Also, SuperSportBet, the South African business launched late last year, is showing early signs of life and reported a tenfold increase in net gaming revenue over the past nine months.

Meanwhile, Moment, its fintech venture, is now live in 40 African countries, the company says, showing significant growth since its launch last year, with total payment volumes growing to USD 242 M while currently processing almost 30% of the Group’s payments.

“We have successfully been implementing our strategy over the past few years, achieving key milestones such as our investment in KingMakers [its gaming division],” says Calvo Mawela, MultiChoice Group CEO.

All these are part of MultiChoice’s strategy to capture a broader slice of consumer spending outside of television. Irdeto, MultiChoice’s global technology arm, also continues to contribute meaningfully, especially as it expands into digital security services that address the growing needs of online and streaming platforms.

Canal+ Takeover Looms as MultiChoice’s Future Hangs in the Balance

The pay-TV industry is under pressure from streaming services, the rise of short-form social media content, and shifting consumer preferences. These challenges are accelerating in MultiChoice’s core South African market, while severe economic, power, and consumer hurdles limit growth across its broader African footprint.

Compounding the strain, the group faces its most challenging foreign exchange environment yet, impacting financial results. In response, MultiChoice is significantly adjusting its cost base while navigating short-term pressures, with an eye on medium- to long-term opportunities in video entertainment, streaming, and emerging verticals.

Adding to the evolving strategy at MultiChoice is the looming Canal+ takeover, which promises to shift the landscape of African broadcasting if completed. With the merger control filing now submitted to the South African Competition Commission, the acquisition would give Canal+ greater leverage in shaping the region’s pay-TV future. Regulatory engagements are already underway, reflecting the weight of a deal that could reshape media ownership across Africa.

At the same time, MultiChoice’s efforts to sustain revenue by implementing a series of price hikes in its Nigerian market amid the naira’s woes have not gone unnoticed by regulators. Some increases, implemented to offset inflationary pressures, have sparked debate over affordability and raised concerns about customer retention in an already strained economic environment.

The Cost of Diversification

While MultiChoice’s efforts to broaden its revenue base are promising, they come at a steep cost. The group’s trading profit dropped 46% in the latest period due to exchange rate pressures in its Rest of Africa segment, coupled with a ZAR 1.6 B (~USD 88.6 M) investment into Showmax.

“Showmax investment cycles are weighing on overall profitability,” the company admitted, even as it noted that its cost-optimisation efforts—driven by a reduction in decoder subsidies and streamlining content—delivered ZAR 1.3 billion (~USD 72 M) in savings. This focus on efficiencies aims to bring full-year savings to ZAR 2.5 B (~USD 138.6 M), up from an initial ZAR 2 B (~USD 110.8 M) target.

The impact of currency fluctuations, particularly in countries like Nigeria, Zambia, and Malawi, remains a core challenge for MultiChoice, which earns revenues in local currencies across its 50 African markets but incurs significant costs in US dollars. Reported revenue in the Rest of Africa segment fell by 28%, and with trading losses growing to ZAR 259 M (~USD 14.3 M) in the first half of FY25, MultiChoice is keenly focused on cost savings though the Group CEO emphasises the need to go beyond that.

“Our focus extends beyond cost efficiency—we are equally committed to grow the business,” says Mawela. “We remain committed to driving new revenue streams and see significant medium to long-term opportunities in video entertainment, particularly in streaming, and in our adjacent new businesses.”

As pressures mount, MultiChoice’s pivot to digital and diversified income sources reflects a necessary evolution but one fraught with challenges.

UPDATE: MultiChoice Group also mentioned it wrote off USD 21 M of cash held in Nigeria with Heritage Bank as its license was revoked in June 2024 and the bank was liquidated.

Africa’s bubbly tech scene, where innovation and grit power an expanding ecosystem, is playing host to a brewing, quiet crisis. While investors hold the keys to crucial capital, strategic guidance, and growth, a new report from Flourish Ventures reveals a troubling dynamic: rather than easing founders’ burdens, investors may be compounding them.

According to Flourish’s “Passion and Perseverance: Voices from the African Founder Journey,” a rare look into the under-treated topic of founder wellbeing, many African founders aren’t comfortable speaking openly with their investors, and only 11% believe their investors genuinely care about their wellbeing.

This startling gap highlights an undercurrent of distrust that permeates the founder-funder relationship in Africa, one that founders say is adding stress instead of relief. As more than one African founder can attest, the journey to build a business is challenging enough. But when investors add pressure rather than support, it creates a more difficult and isolating environment, pushing many founders toward burnout.

“There’s a difference between constructive stress and counterproductive stress,” said Ameya Upadhyay, Venture Partner at Flourish Ventures, a fintech venture capital firm with notable companies such as Flutterwave and FairMoney in its portfolio.

“Investors don’t have to be soft,” Upadhyay says, “but founders need to understand what’s meant to push them forward versus what risks pulling them apart.”

‘Dear Founder, how art thou?!’

The survey, which gathered responses from over 160 startup founders across 13 African countries, sheds light on the passion driving these entrepreneurs — 81% say they enjoy the founder journey, and nearly two-thirds would start another company even if their current venture fails.

Being a founder is one of the most rewarding things you could ever do,’ says Diana Owusu-Kyereko Co-founder and CEO of MAKA; a fashion and beauty marketplace. “Most founders would say there’s nothing they would rather be doing.”

Yet, that passion is often met with extreme stress, as founders face down a volatile economic landscape marked by inflation, macroeconomic instability, and tight funding environments.

“The external stressors—factors largely outside our control—are big contributors to stress and burnout for most entrepreneurs,” says Iyinoluwa Aboyeji, Founding Partner at Future Africa, an early-stage funder.  “As an investor, I try to help my founders focus on what they can control and let go of what they cannot.”

Nearly 60% of respondents cited fundraising as a top source of stress, underscoring the immense pressure tied to securing and managing investor capital.

In addition, Africa’s female founders face heightened isolation and unique stressors in the startup ecosystem. Compared to their male peers, women are 2.3 times more likely to experience loneliness, 1.7 times more likely to feel strained by work-life balance, and 1.6 times more likely to fear failure, the report highlights.

“Female founders need more equitable representation and visibility in the VC ecosystem, as well as access to peers who truly understand their unique experiences,” says Isis Nyong’o Madison, Partner at Asphalt & Ink and Co-founder of WomenWork Kenya.

The Trust Gap

Many African founders perceive a gap in trust with their investors, with only 17% feeling comfortable enough to have open conversations. Founders are often hesitant to disclose their full scope of challenges, fearful it might be viewed as a weakness.

According to the data, 78% of founders agree that “being a founder is a lonely job,” yet only 14% reported being fully open about their stresses and struggles.

“As the founder and leader of a startup, the buck stops with you,” acknowledges Laurin Hainy Co-founder and CEO of FairMoney, one of Nigeria’s fast-rising challenger banks.

We founders feel the weight of our responsibility to our teams, investors, and communities. We know it’s our burden to bear and we don’t want to put that burden on others.”

This reluctance to communicate openly with investors not only exacerbates isolation but also makes it harder to cultivate a constructive, transparent relationship that could support long-term resilience.

Rose Goslinga, co-founder of Pula, a notable African insurtech startup, emphasised that founders need investors who prioritise them as people, not just as business operators.

“When choosing investors, make sure to ask: Will they put the founder or the business first? The right answer is always the founder, because a dedicated founder prioritises the business above all. Great investors believe in the person behind the business model, not just the model itself,” she says.

Investors’ Role in Founders’ Mental Health

For many founders, the support they receive from investors ends at financial backing and communication barriers exist as many don’t think their investors care. Flourish’s report reveals that fewer than 2 in 10 founders are completely comfortable having an open conversation with their investors, and only 1 in 10 believe investors truly care about their wellbeing.

According to Emmanuel Adegboye, Head Investor at Madica, this is a missed opportunity to foster founder resilience.

“The question is, what role should investors play in helping founders build resilience?” Adegboye asks. “Access to tools like coaching and training can significantly enhance founders’ ability to navigate startup challenges.”

Many founders recognise the value of professional support, yet only 25% reported using resources like coaching or therapy. Zachariah George, Managing Partner at Launch Africa Ventures, observes that “a big component of entrepreneurs’ stress comes from feeling alone.”

Therapy and coaching can provide vital tools to manage stress, yet many founders refrain due to cost, time constraints, and a lingering stigma around seeking help. The survey suggests that a shift in the founder-funder relationship could help break down these barriers, allowing founders the support they need to stay mentally strong.

Coping Mechanisms Under Pressure

Facing the strain of high expectations, African founders have adopted their own coping mechanisms. The survey found that founders frequently lean on exercise (59%), personal relationships (49%), and sleep (45%) to manage stress. Yet even these methods have their limits, especially when investors pile on additional pressure.

Tayo Oviosu, founder of Nigerian fintech Paga, believes more founders could benefit from coaching. “Even the world’s best athletes rely on coaches — why wouldn’t we?” he points out, stressing that proper guidance and encouragement can make a world of difference. But for many, financial and time constraints make access to these resources difficult, underscoring a potential role for investors willing to prioritize founders’ wellbeing.

In a high-stakes industry where competition and investor expectations are intense, fostering healthier relationships between founders and investors is crucial.

The insights from Flourish Ventures’ report are a wake-up call to stakeholders. Thriving startups come from building trust and acknowledging the full human complexity of the founders behind them. For African tech entrepreneurs, the stakes couldn’t be higher: creating an environment where they are seen, supported, and empowered may well be the key to unlocking not only innovation but also sustainable success across the continent.

Africa’s leading e-commerce player, Jumia, is hitting a wall. The company’s third-quarter 2024 results reveal a 13% year-over-year revenue decline to USD 36.4 M as the company grapples with stagnation despite its attempts to weather tough macroeconomic conditions. Even as Jumia looks to offset some of these headwinds by targeting underserved rural areas, its path to profitability and sustainable growth remains riddled with challenges.

Jumia’s latest financial results highlight a complex picture. While the company reported positive growth on a constant currency basis—with revenue up 9% and Gross Merchandise Value (GMV) increasing by 29%—these numbers mask underlying struggles. Foreign exchange devaluations in major markets, including Nigeria and Egypt, have severely impacted Jumia’s financials. As a result, actual GMV remained nearly flat, dipping 1% to USD 162.9 M, and the company’s adjusted EBITDA loss widened to USD 17 M, up 15% year-over-year.

“Continued resilience in our usage and business fundamentals” amid these pressures is how Jumia’s CEO, Francis Dufay, framed the situation. Yet, while Dufay has highlighted growth in “Quarterly Active Customers” and “Orders,” the company’s active customer count remains stubbornly flat at around 2 million. This number hasn’t budged since Q3 2023 and has steadily declined from a peak of 3.8 million at the end of 2021. This prolonged stagnation poses a headache, particularly in an industry where customer growth often drives platform scalability and profitability.

“Upcountry” Expansion: A Gamble on Rural Markets

In response to this plateauing customer base, Jumia has turned to an ambitious new strategy—going “upcountry.” The company has begun to expand its pickup stations into rural and semi-urban areas, betting that this shift will bring in new customers and reduce the high costs associated with last-mile delivery.

For Jumia, reaching beyond major cities isn’t just a growth opportunity; it’s a survival strategy. Africa’s rural areas have largely been left out of the e-commerce boom due to poor infrastructure and high delivery costs. By leveraging pickup stations, Jumia can centralise deliveries in remote regions, bypassing costly door-to-door service and making online shopping more accessible and affordable for rural consumers.

The City Expansion initiative, already visible in Uganda with 99 pickup stations across 25 cities—as well as Nigeria, Senegal, and Ivory Coast—is a step toward capturing the rural market. Dufay expressed optimism about this model, noting, “We can offer competitive delivery options without the need for complex last-mile logistics.” The benefits are twofold: rural customers gain access to a broader range of products, while Jumia cuts costs—a critical move as it strives for profitability.

That quest remains elusive and the journey has been arduous. Jumia has recorded over USD 1 B in losses since listing on the New York Stock Exchange in 2019. Its stock has fallen 70% since its IPO as growth stalls and operating losses mount.

Exiting South Africa and Tunisia to Consolidate Resources

Yet Jumia’s struggle with customer stagnation goes beyond expanding into new territories. The company is also retrenching from certain markets. Announcing its exit from South Africa and Tunisia, Dufay described the decision as difficult but necessary to “refocus our resources on the other nine markets, where we see more promising trends in terms of scale and profitability.” Both markets accounted for only 2% of orders and 3% of GMV in the first half of 2024 and have been underperforming amid fierce competition and macroeconomic instability.

South Africa’s competitive landscape, in particular, has become increasingly crowded. Global retail giant Amazon officially entered the market in May 2024, heightening pressure on local players. Similarly, with its limited growth potential and challenging economic conditions, Tunisia offered little upside for Jumia. By trimming these markets, Jumia hopes to concentrate its resources where it sees stronger growth potential, such as Egypt, Nigeria, and Kenya.

Challenges and the Road Ahead

Despite the strategic rationale behind these moves, Jumia’s struggle to turn a profit continues. The company’s cash flows used in operating activities amounted to USD 26.8 M in Q3, an increase from the previous year. Although the company improved its liquidity position to USD 164.6 M, bolstered by a recent At-the-Market offering, these funds are earmarked for operational costs rather than robust expansion or technological innovation.

Jumia’s ability to achieve profitability now hinges on the success of its rural market strategy and its streamlined market focus. However, even as the company looks to pivot, the pressure from competitors and economic uncertainties remains intense. Social commerce platforms and cottage e-commerce players are gaining ground. In contrast, Jumia’s smaller rivals have found success using agent-led models, which have proven effective in rural regions but are challenging to scale.

Jumia’s emphasis on pickup stations could indeed be a game-changer, but it’s a long-term bet. It demands the company to establish a robust infrastructure while ensuring enough traction in rural areas to justify the expansion costs.

For now, Jumia’s latest moves may offer a temporary respite from its struggles with stagnant growth, but the company’s journey to profitability remains uncertain.

Internet service disruptor Starlink came to Africa with a plan: deliver fast, reliable satellite internet to poorly served areas. But as the company now faces capacity issues in the continent’s urban centres, it’s becoming clear that Africa has other ideas.

From bustling metropolises like Nairobi and Lagos to Harare and Lusaka, city dwellers have driven Starlink’s surge in demand. This rush has even forced the company to halt new sign-ups in major urban areas, despite having reserved “significant capacity outside of city centres,” according to owner Elon Musk’s own statement on X, in which he added that Starlink is working to increase internet capacity in dense urban areas in Africa as fast as possible.

The company says too many users are trying to access the Starlink service in Africa’s urban regions which are currently at network capacity. Observers reckon the company may have underestimated demand in Africa’s urban areas and overestimated need in remote locations.

The result? Starlink’s kits are now unavailable for purchase in some of the continent’s biggest cities, leaving hopeful customers in limbo.

The Capacity Mismatch

When Starlink launched in Africa, its initial rollout aimed at providing a solution to the internet black holes in regions with unreliable service. Yet, urban residents—hungry for faster, more reliable connectivity than their traditional ISPs offer—are snapping up kits faster than SpaceX, Starlink’s parent, can deliver capacity.

Kenya, for instance, has seen Starlink subscriptions grow to approximately 8,000 users in less than a year, even ranking as the country’s 10th largest ISP. Meanwhile, Nigeria boasts over 23,000 active users. But these figures mask a deeper issue. According to local reports, the flood of users in cities has driven average speeds down to mere double-digit Mbps, well below Starlink’s promised performance.

Starlink’s struggle to manage urban demand has not gone unnoticed. In Kenya, Safaricom, the dominant telecom provider, called for stricter regulations on satellite ISPs, arguing players like Starlink should be required to partner with local operators. In Zimbabwe, Zambia, and beyond, signs of strain are evident. Urban customers are increasingly finding the service “Sold Out,” and speeds are lagging.

SpaceX did not respond to a request for comments.

Roaming Workarounds and Cracks in the System

Adding to the complexity, Starlink’s Roaming service—intended for mobile, temporary internet access—has been creatively used to bypass geographical restrictions. Users in countries where Starlink lacked regulatory approval would purchase kits in licensed areas and use them via the Roaming package, which costs USD 100.00 monthly. This tactic let some customers in unlicensed regions connect to the Starlink network, creating a shadow user base that thrived on loopholes.

But that workaround is now being systematically closed. In late October 2024, African countries disappeared from Starlink’s Roaming subscription options, frustrating users who had come to depend on this solution. Reports from South Africa suggest a Facebook group was among the first to flag the change, with one user sharing, “I’m not sure if this is a glitch…but when I try to order the roam package, there aren’t any African countries listed.” An unofficial Starlink importer, IcasaSePush, later confirmed that roaming subscriptions were indeed gone.

This crackdown hits especially hard in South Africa, where Starlink remains unlicensed. Some early adopters had managed to maintain service. However, with Roaming gone, these users now face the possibility of service suspension.

Regulatory Hurdles and Government Responses

The retreat of Starlink’s roaming feature isn’t entirely surprising, given mounting regulatory scrutiny. In Cameroon, authorities outright banned the import of Starlink kits, citing unlicensed operations. Nigeria’s telecom regulator recently blocked the company from raising prices without prior approval, and South Africa’s rules present their own set of barriers. The country’s 30% Black ownership mandate for tech firms remains a sticking point, although some government officials have hinted at potential exemptions.

Moreover, political attitudes toward Starlink are shifting favourably. Kenya’s President William Ruto praised Starlink for boosting competition. In South Africa, President Cyril Ramaphosa has urged Musk to invest, calling the billionaire’s success “remarkable.” Still, Starlink’s official coverage map continues to list South Africa’s launch date as “unknown.”

But, in any case, the removal of the Roaming service reflects a tightening strategy, likely aimed at encouraging proper licensing and managing capacity more effectively. Stellar Systems, an authorised Starlink retailer in Zambia which spoke to MyBroadband, stated that the misuse of roaming plans has exacerbated the strain on the network. “Misuse…by users in unofficially supported countries may lead to the permanent shutdown of the roaming feature,” the retailer warned.

Observers also speculate that Starlink’s adjustments might be a response to government pressure and logistical challenges.

Ultimately, Starlink’s African journey highlights the tension between its vision and the continent’s realities. While remote users may have been the intended beneficiaries, urban centres are where the true demand lies. Now, with regulatory hurdles and strained networks, the question is whether Starlink can recalibrate fast enough—or if Africa’s own market forces will continue to reshape its strategy.

South Africa’s largest e-commerce platform, Takealot, is turning its gaze beyond metropolitan strongholds in a strategic push to capture the elusive township market. As competition from international heavyweights like Shein, Temu, and Amazon ramps up, Takealot is betting that last-mile delivery solutions and government partnerships can keep it in the lead.

But breaking into township economies is fraught with challenges. Poor infrastructure, security risks, and high delivery costs have long held back e-commerce penetration in South Africa’s underserved regions. Yet, Takealot believes it has a plan to not just break through but thrive.

Takealot’s latest initiative, launched in collaboration with the Mpumalanga provincial government, is designed to tackle one of the most stubborn barriers to e-commerce: effective last-mile delivery. The company plans to recruit 1,000 delivery drivers in Mpumalanga, a key province for its township rollout.

Tshepo Marumule, Takealot’s head of external affairs, underscored the importance of reaching residents who previously had limited access to the platform. “People need to know that they don’t have to go all the way to Mbombela to have access to what they need as they can have it delivered,” he told Sunday Times.

Takealot will deploy these drivers for both its main platform and the food delivery service Mr D. This move aims to unlock demand by addressing a core pain point: accessibility. The company is also investing in electric bicycles for riders, hoping to reduce costs and enhance safety in areas where motorcycles are seen as dangerous or inefficient.

Security Concerns and Cost Challenges

Takealot’s township expansion comes at a time when e-commerce in South Africa is grappling with heightened security issues. FarEye CEO Kushal Nahata recently pointed out that the country’s delivery costs are 50% to 100% higher than the global average, partly due to rampant vehicle hijackings. Data from Tracker shows that delivery vehicles are now more likely to be hijacked than personal cars, with incidents spiking during peak retail periods like Black Friday and Christmas. “Security expenses are the biggest concern for couriers,” the SA Production and Inventory Control Society noted in a recent report.

Marumule acknowledged these risks, stating that Takealot is in discussions with the Mpumalanga government to find ways to safeguard drivers. For Takealot, mitigating these security threats is not just a logistical issue but a financial one, as heightened security demands could erode the cost benefits of expansion.

Lessons from other markets

Takealot is not alone in navigating the complexities of e-commerce in underserved areas. Jumia, another major player in Africa’s e-commerce market, has similarly faced infrastructure and cost hurdles but found partial success with a network of pickup stations. By allowing customers to collect orders from central locations, Jumia has reduced last-mile delivery costs and boosted accessibility in places like Uganda, where 24% of deliveries now occur in rural regions.

This pickup model has proven especially effective in areas lacking formal addresses and reliable roads. Jumia’s CEO, Francis Dufay, emphasised that pickup stations have helped the company offer “competitive delivery options without the need for complex last-mile logistics.” However, even with this success, the challenge of scaling sustainably remains, especially as economic pressures mount.

Township economies in South Africa represent a tantalising yet challenging market, estimated at ZAR 200 B (~USD 11.4 B) annually by Trade Intelligence. Despite this potential, issues like limited internet access, digital illiteracy, and consumer distrust in online payments persist. Andy Higgins of Bob Group pointed out that e-commerce platforms must adapt by offering “mobile-friendly interfaces, flexible payment options, and affordable delivery solutions.”

Regarding affordable delivery solutions, Higgins opines that partnerships with local couriers or logistics services that understand the nuances of township delivery can be a gamechanger for township businesses while noting that pickup points can overcome the lack of formalised addresses in these areas.

“Likewise, security concerns can be alleviated by limiting distribution to more secure locations using a pickup point network,” he adds.

Digital literacy campaigns and partnerships with community organizations could also help, but these efforts require long-term commitment. Takealot, like others, will have to grapple with the realities of providing e-commerce services in areas where basic infrastructure is lacking.

As Takealot works to entrench itself deeper into the township market, it faces a rapidly changing landscape. Amazon’s entry into South Africa could shake up the market, with promises of economies of scale that could drive down prices. Meanwhile, fast-fashion e-tailers Shein and Temu have made aggressive inroads into the local market, leveraging global supply chains to offer unbeatable prices.

This shakeup could redefine e-commerce for millions of South Africans—but only if Takealot, and its competitors, can deliver on their promises in the face of significant hurdles.