With only a few hours until the year ends, African startup founders and investors have been reflecting, relaxing, and drawing up strategies for the new year.
For any entrepreneur in Africa, 2024 has been an eventful year with numerous challenges but also exciting opportunities. We asked seven startup founders and investors what events stood out for them in 2024 and how they believe they impacted the startup ecosystem. Here’s what they had to say.
Fintech startups led the charge
Fintech continued to dominate Africa’s tech ecosystem in 2024. Dr Austin Okpagu, Country Manager of VertoFX Nigeria, noted the rise of stablecoins in cross-border payments and artificial intelligence (AI) applications as defining trends of 2024.
Stablecoins, in particular, are addressing inefficiencies in cross-border transactions, enabling businesses to operate with reduced costs and faster processing times.
This innovation isn’t happening in a vacuum, he said, with regulatory direction providing a foundation for growth. Nigeria’s Central Bank moved to sanitise the country’s fintech sector, while Kenya’s Central Bank plans to roll out instant payments across the country.
“Clearer regulations mean less risk for investors and businesses alike that are risk-averse — signalling stability within the ecosystem. That means more capital importation flowing into African startups, which will helps them scale and compete with other global pacesetters,” Okpagu said.
Cybersecurity got more important
As fintech adoption grows, so does the need for robust data privacy and cybersecurity measures to protect customer and business data.
In 2024, companies increasingly adopted advanced encryption technologies, performed regular security audits, and became more transparent about how customer data was used, according to Yele Oyekola, CEO of Duplo.
“Companies have started investing more in regular security audits to identify risks and vulnerabilities proactively. They are also implementing advanced encryption technologies to ensure customer information is safeguarded at every stage of a transaction.”
Written by Omoruyi Edoigiawerie, a seasoned startup attorney with over a decade of experience. Learn more.
Cross-border trade gained momentum…slowly
The push to enhance intra-African trade was another notable theme Oyekola observed. A negligible portion of trade is conducted between African countries, and the African Continental Free Trade Area (AfCFTA) continues to drive efforts to break down barriers to commerce across the continent.
Fintechs are playing a key role in supporting these efforts by providing smoother cross-border payments. However, challenges persist.
Currency volatility and regulatory discrepancies between countries remain significant hurdles. While fintechs attempt to counter these issues through partnerships and technology, much of the responsibility remains with governments.
The return of the unicorns
Unicorns are meant to be rare, and that holds true for Africa, with the continent boasting just nine. For Damilola Teidi-Ayoola, Head of Platform & Networks at Ventures Platform, Moniepoint’s $110 million funding round, which saw it join the unicorn club, was the year’s standout event.
Since it was founded in 2015, the startup has posted consistent and remarkable growth. From building software for banks in Nigeria, it now serves more than three million businesses and individuals while its blue point of sales (PoS) terminals dots the country’s landscape.
“While the full impact remains to be seen, similar milestones in the past — such as the Paystack acquisition, previous unicorn status achievements, and other notable startups making significant strides — have consistently reshaped global perceptions of Africa over the past decade,” Teidi-Ayoola said of the milestone.
Achieving a valuation of over $1 billion during a global funding winter and tough macroeconomic conditions in Nigeria highlighted the resilience and viability of African startups even under challenging conditions, according to Onyinye Stephanie Oguego, Co-founder of MyStash.
Moniepoint wasn't the only African unicorn this year. TymeBank became a unicorn following a $250 million investment led by Nubank. Interestingly, both unicorns have achieved this status by effectively combining digital and offline strategies to win market share and provide a template for other startups.
More mergers and acquisitions
Mergers and acquisitions have become more common in Africa’s startup ecosystem. MaxAB and Wasoko completed a merger that saw both companies combine resources but also narrow their geographic focus to create the largest B2B e-commerce platform for informal retailers across Africa.
Meanwhile, Risevest completed the acquisition of Hisa, a Kenyan startup, adding to its portfolio of wealth management startups serving Africa. Carbon also acquired Vella Finance to drive its B2B foray.
Jana Aboughaly of Flourish Ventures emphasised that these consolidations not only create value for investors but also pave the way for reinvestment into the ecosystem.
“The mergers and acquisitions in Africa this year highlight a maturing tech ecosystem, with strategic consolidations driving growth, scale, and innovation,” she noted.
Funding challenges persisted
Despite these positive developments, 2024 was not without its difficulties. Andreata Muforo of TLcom Capital pointed to the constrained funding environment, especially for late-stage startups.
Macroeconomic challenges, particularly in Nigeria, limited access to local debt facilities and working capital. For founders, this has required a more strategic approach to fundraising and runway management.
“Despite these hurdles, strong businesses with sound unit economics continued to attract funding, albeit with stricter terms. Founders who adapted their business models quickly and built strong relationships with funders were better equipped to navigate capital access,” Muforo said.
Interestingly, this challenging period also presented opportunities for investors. With valuations aligning more closely with risk profiles, it became an attractive time for venture capital funds to deploy capital.
Looking ahead
The lessons from 2024 are clear — African tech is not immune to global headwinds, but the resilience of its stakeholders remains crucial.
However, the milestones of 2024 serve as reminders of what is possible on the continent. For founders, the year’s challenges underscore the importance of adaptability and strategic thinking. For investors, the more reasonable valuations and robust business models emerging from the ecosystem make it a great time to back African startups.
“We expect 2025 to see a gradual improvement globally, with a question of how quickly Africa will follow. On this basis, the impact of the 2024 trends on the ecosystem in 2025 may result in a more selective approach of VCs to support only the most compelling companies, a continued opportunity to deploy capital at reasonable terms, and persistent challenges for liquidity and exits at prices that are aligned with investors expectations,” Maurizio Caio, Founder and Managing Partner of TLcom Capital, noted.
