The decline in startup funding in Africa has been a cause for concern as it has led to an increase in startup shutdowns. In the first half of 2024, African tech startups only secured $780 million in funding, marking a significant 57% decrease compared to the same period in 2023. This funding shortfall has resulted in the closure of some notable startups like 54gene and Sendy, who faced challenges due to funding problems.
One of the main reasons for the reduced funding is the rising global interest rates, making capital more expensive and investors more risk-averse towards early-stage startups in emerging markets like Africa. Additionally, African startups face challenges such as unreliable infrastructure, limited access to capital, and regulatory fragmentation, making it difficult for them to attract and retain investment.
Internal mismanagement and leadership mistakes have also played a critical role in startup shutdowns. For example, Dash, a once-promising fintech disruptor, shut down in 2023 after burning through over $86 million in funding without achieving product-market fit.
In Q1 2025, several startups have also shut down, including Joovlin, Edukoya, Bento Africa, and Lipa Later. Joovlin, a Nigerian fintech startup, aimed to empower micro-suppliers and retailers but struggled to scale its user base and generate sufficient revenue. Edukoya, a Nigerian edtech startup, faced challenges with market readiness and connectivity issues, leading to its decision to shut down. Bento Africa, a Nigerian HR and payroll technology startup, temporarily ceased operations due to internal and external challenges. Lipa Later, a Kenyan Buy Now, Pay Later fintech startup, was placed under administration after struggling with mounting debts and failing to secure additional funding.
Despite the negative impact of startup shutdowns, there is a silver lining. Understanding the reasons behind failures can lead to more resilient and adaptable business models. However, these shutdowns also highlight the fragile state of Africa’s startup ecosystem, where many startups struggle to weather economic downturns, build sustainable models, and navigate governance hurdles. It is essential for stakeholders to address these challenges to ensure the long-term success of African startups. The world of fashion is constantly evolving, with new trends and styles emerging every season. From bold prints to minimalist designs, there is something for everyone in the world of fashion. One trend that has been gaining popularity in recent years is sustainable fashion.
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