Last year, funding for African startups surpassed $2 billion, rebounding to pre-pandemic levels, yet presenting a complex picture. While this resurgence is encouraging, experts predict a continuation of measured growth in 2025, echoing the cautious strategies adopted over the past two years.

the venture capital landscape has shifted dramatically since the boom of 2020-2021. A significant decrease in mega-deals, mirroring a global trend, has pushed both local and international investors to prioritize companies with sustainable business models and clear paths to profitability.This emphasis on fiscal responsibility has created a challenging habitat for startups that previously thrived on high valuations and rapid expansion.

This new reality has led to the closure of some high-profile startups that failed to meet the stringent criteria of profitability and sustainability.Mobile commerce platform Copia and agri-focused data analytics firm Gro Intelligence,both of which had secured over $100 million in venture funding,are prime examples. Gro Intelligence,in particular,had reached a valuation of $850 million at its last funding round,highlighting the dramatic shift in investor sentiment.

The implications extend beyond individual company failures. As U.S. venture capitalist Paul Graham famously said, “Startup equals growth.” When growth stalls or becomes unsustainable, the very foundation of a startup is threatened. The closures of copia and Gro Intelligence, alongside Ghanaian fintech Dash and Nigerian biotech 54gene in 2023, signal a critical juncture for the African tech ecosystem. these instances demonstrate that even growth-stage and late-stage startups are now exposed to increased risks, a departure from the past when failures were largely confined to early-stage ventures.

Facing these pressures, some companies have opted for strategic pivots rather than succumbing to closure. B2B e-commerce giants wasoko and maxab,such as,merged their operations to conserve capital and streamline resources,leveraging their combined industry expertise to weather the economic storm. This proactive approach underscores the adaptability and resilience of the African tech sector.

simultaneously, companies like Moniepoint, Moove, and TymeBank have experienced significant growth and attracted ample investments from major players such as Uber, Google, and Nubank. these companies have benefited from strong growth metrics and demonstrable profitability, solidifying their position as leaders in the African tech landscape.

These trends illustrate the contrasting realities of the African tech market post-boom: significant challenges alongside remarkable adaptability. As the ecosystem matures, startups are facing greater scrutiny and must demonstrate tangible value to attract and retain investment.

African unicorns and soonicorns continue to capture attention, their successes and struggles shaping the narrative around the continent’s tech potential. Now is an opportune moment to highlight these ventures valued at or nearing a billion dollars.