Creating value in Africa’s startup ecosystem - the way forward
Few topics attract as much debate in African venture capital as exits. A decade into Africa’s startup journey, the ecosystem has proven it can build valuable, scalable companies. The real question is no longer whether African founders can create value, but how that value can translate into liquidity, and whether the current debate around “no exits” accurately reflects reality.
At TechCabal’s Exit Series: When Will the Exits Cross the Road? Industry experts including Babacar Seck of Askya Investment Partners, Tokunboh Ishmael of Alitheia Capital, and Chirantan Patnaik of British International Investment discussed this issue in depth. The conversation surfaced familiar challenges but also clear signs of progress. Africa’s venture ecosystem is not stagnant; it is maturing.
1. A Decade of Building Value
Over the past decade, African startups have raised more than $20 billion in venture funding, producing regional leaders across fintech, logistics, health, and commerce. This progress is evident in a growing list of successful exits, including Paystack’s acquisition by Stripe, Sendwave’s sale to WorldRemit, InstaDeep’s acquisition by BioNTech, and Fawry’s IPO on the Egyptian Exchange. Alongside these, a steady stream of smaller trade sales and secondary deals has quietly returned capital to investors.
Exits matter because they recycle capital, reward early risk-taking, and attract new investors into the ecosystem. They also show that African founders are not only building sustainable businesses but also creating value for their investors. The next challenge is converting that value into consistent liquidity and ensuring more of it stays on the continent.
2. The Structural Hurdles
Liquidity remains constrained. Local exchanges are shallow, regional markets fragmented, and large domestic acquirers are still emerging. Tokunboh Ishmael highlighted that many African startups face structural barriers to consolidation, from currency risk to complex regulatory differences between markets. Still, she pointed to regional integration, particularly across West Africa, as a practical path to unlock cross-border deal flow and create the next generation of African acquirers.
Chirantan Patnaik added that African venture investors must also embrace longer timelines. “If you look at the top decile VC funds globally, they take around 15 years to make returns,” he said. He argued that Africa’s cycle is still unfolding, not underperforming, and that more tailored market structures are needed to support high-growth, venture-backed companies as they mature. Both he and Tokunboh agreed that developing modern, layered capital markets with entry points suited to growth-stage firms is essential for meaningful liquidity.
3. Where the Opportunity Lies
Exits are already occurring, though often quietly. Panelists noted that more than 100 African transactions above $25 million since 2019 have included secondary elements, returning an estimated $1–4 billion to investors. As Babacar Seck emphasized, secondaries remain an underused but important liquidity path in African ventures. He also highlighted that the recent market correction has refocused investors and founders on fundamentals of value creation — product-market fit, governance, healthy unit economics, and operational discipline.
Our perspective at Askya is that the broader conversation around exits needs recalibration. Many secondaries are taking place, and providing liquidity to the smart early-stage investors. Besides, there is always a buyer, at the right price - hence entry valuations must reflect underlying fundamentals and realistic exit valuations. Disciplined investing and real value addition are what ultimately unlock liquidity and sustain long-term returns.
Secondaries, mergers, and targeted acquisitions are already creating liquidity suited to Africa’s stage of development. As leading companies like Moniepoint, M-Kopa and MNT-Halan mature, the opportunity for structured exits through IPOs, cross-border M&A, and local acquisitions will only grow.
4. The Path Ahead
Africa’s venture ecosystem no longer needs to prove it can create value — it has. The next decade must focus on building strong companies that are exit-ready by design and scaling up exit routes, through deeper regional collaboration, more transparent secondary markets, and policies that support listings and acquisitions.
As Babacar Seck summarized, “Long-term value creation will come from building businesses that can themselves become acquirers.” That vision requires patient capital, investors with high value-add, and an ecosystem focused on building exceptional companies.
