Why 53 Startups In Africa Failed And What’s Next.

2024-08-14 16:14:31 | By Staff Writer


Over the last decade, Africa’s startup scene has seen some real ups and downs, with 53 startups across seven countries closing their doors. It’s a story of dreams, challenges, and a few hard lessons learned. Let’s break it down, shall we?

Who’s Closing Shop?

  1. Nigeria: Leading the pack with 25 closures. Ouch!
  2. Kenya: Not far behind with 12.
  3. South Africa: Seven startups bit the dust.
  4. Egypt & Ghana: Four each.
  5. Uganda & Tanzania: Two and one, respectively.

Why Are They Shutting Down?

It’s tempting to blame a lack of funds, but that’s only part of the story. Many of these startups had solid backing. Here’s what really went down:

  1. Market Liquidity Issues: Investors got picky, and cash flow dried up.
  2. Internal Drama: Nigeria’s Pivo folded due to co-founder conflicts, while Ghana’s Dash collapsed under the weight of a scandal involving its CEO.
  3. Operational Hiccups: Ethiopia’s Qefira, a classifieds platform, shut down after a change in ownership.

The Bigger Picture

Sure, funding is crucial, but so is leadership, governance, and navigating a tough market. Here are a few takeaways:

  1. Lesson #1: It’s Not Just About the Money – Secure funding, but make sure you’ve got a solid plan and team to manage it.
  2. Lesson #2: Due Diligence is Key – Investors are becoming more cautious, so startups need to step up their game.
  3. Lesson #3: Adapt or Die – The market is tough, and only the most adaptable will survive.

A Look at the Numbers

Nigerian startups alone saw a staggering $70 million of investor funds vanish in 2024 following the closure of nine companies. This isn’t just a blip on the radar; it’s a wake-up call for the entire African startup ecosystem.

Looking Forward

So, while it’s sad to see these startups go, there’s a lot to learn from their journeys. The African startup ecosystem is still young, and with the right moves, the next decade could tell a much different story.