The tech startup scene has grown significantly in Africa over the past decade, with huge increases in deal sizes, ticket sizes, and overall funding. Most of this capital has focused on the “Big Four”: Nigeria, Kenya, South Africa, and Egypt. In 2024, these nations represented more than 84% of venture capital investment on the continent.

Despite the success of these markets, today’s investors are scouring new horizons on the continent for underpriced opportunities: high-potential startups in markets in which other investors aren’t looking.

The case for catalysing Africa’s venture ecosystem with capital is clear. During COVID, the tech thesis in Africa was accelerated by five to ten years due in large part to the pandemic’s effect in bridging the digital divide. Founders tackling the most meaningful challenges on the continent captivated the imagination of investors around the world, thus capturing higher valuations with lower due diligence. As we fast forward to today’s funding slowdown brought on by macro-economic headwinds, it is worth reflecting on the fact that investors have often made errors in evaluating African startups compared to their international counterparts. In Africa, there is a unique “need-to-have” versus “nice-to-have” focus within investment sectors, due to the huge potential to improve the quality of life for hundreds of millions by introducing technology. That’s why Africa’s startup ecosystem will continue to solve the most painful and meaningful problems in spite of limited resources. Africa has proven itself to be the resilient continent and its startups are re-learning both the science and art of weathering adverse effects of falling valuations and a tougher economy. In the unwavering discipline of today’s economic market, more upside appears possible from the launchpad of Africa.

There is a more limited but focused pool of angel investors and early-stage venture capital funds focused on Africa, and they will continue to invest in local, early-stage startups with high potential to scale. Operationally, for startups on the ground, arguably the best time to gain market share is when there is less competition and more floating talent to build and grow your strongest startup for the next 3-5 years.  Knowing that “fortune will favour only the brave”, Africa’s venture ecosystem has no choice but to continue to favour the bold path forward.