Too Many Fundraises, Not Enough Returns: The African Tech Dilemma
The African tech ecosystem is experiencing a boom in funding, but the reality painted by a recent panel discussion at Moonshot by TechCabal 2025 reveals a concerning trend: a significant gap between capital raised and realized returns. Bankole Cardoso from Delta40, Sadaharu Saiki of Sunny Side Ventures, and Esohe Igbinoba, a Venture Partner at Vencapital, dissected the core challenges hindering liquidity in the African tech space. The panel’s unflinching assessment highlighted that while startups are attracting investment at an unprecedented rate, the number of successful exits, like IPOs and acquisitions, remains critically low.
The Liquidity Bottleneck in African Tech
The conversation emphasized that while numerous African startups are experiencing rapid growth, few achieve the liquidity events necessary to provide returns to investors and reward founders. These exits are essential for recycling capital and sustaining the financial supply chain. As Sadaharu Saiki pointed out, exits are crucial for the long-term viability of the venture capital (VC) landscape in Africa. VCs need successful exits to fundraise themselves, making Africa a compelling investment destination. His comparative research, unfortunately, wasn’t detailed, but it helped underscore the stark contrast between the inflow of capital and the relatively slow pace of exits, which threatens the ecosystem’s sustainability. The imbalance between fundraising and exits indicates a need to address structural gaps that impede liquidity and ensure the African tech sector’s continued development.
The panel’s insights underscore a critical need to address the structural issues that hinder liquidity within the African tech sector. By focusing on boosting exit opportunities, the continent can foster a more sustainable and rewarding ecosystem for both startups and investors, ensuring the long-term growth and success of African tech.
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Related Keywords: African tech funding, African tech investment, Tech startups Africa, Venture capital Africa, African tech returns, Fundraising in Africa, Startup failure Africa, African tech market, Investment challenges Africa, Africa tech ecosystem
