The African startup funding winter, explained without the doom (1/16)

1/ Every week someone asks me if African tech is dead. It is not dead. It is cold. Here is why it got cold, who froze, and what the survivors are doing differently.

2/ 2021 and 2022 were the hot years. Money was cheap everywhere, interest rates were near zero, and every fund wanted an "Africa thesis". Fintech took the biggest share by far.

3/ Then rates went up worldwide. When a fund can earn a safe 5% on government bonds, a Series A in Lagos has to work much harder to look attractive. This was not about Africa. It hit everyone. It just hit us harder.

4/ The trackers (Partech, Briter Bridges, Africa: The Big Deal and others) disagree on the exact totals because they count differently. They agree on the shape: a peak in 2022, a big drop in 2023, lower again in 2024. Pick any of them, the curve looks the same.

5/ More of the money that did arrive was debt, not equity. Debt makes sense for asset-heavy businesses like solar and lending. It is a very different animal from a seed round.

6/ The shutdowns were painful and public. Dash in Ghana closed in early 2023. 54gene in Nigeria closed the same year. In Kenya, Copia went into administration in 2024, and Gro Intelligence shut down that year too. Each had its own story. Together they made investors nervous.

7/ A few of those stories involved governance problems. Most did not. Most were about burning dollars to grow in currencies that were falling.

8/ That is the part outsiders miss: FX. If your revenue is in naira, cedis or Egyptian pounds, and your valuation, your cloud bill and some salaries are in dollars, a devaluation can halve your company in a quarter without a single customer leaving.

9/ Nigeria's FX unification in 2023, Ghana's cedi crisis in 2022, Egypt's repeated devaluations. Founders did nothing wrong on those days and lost anyway. This is a policy problem. It is also a planning problem.

10/ What the survivors do: 1) profitable unit economics before growth, not after. 2) price in local currency, but hold reserves in dollars where the law allows. 3) cut dollar costs hard: regional hosting, fewer foreign SaaS tools, cloud credits used wisely.

11/ 4) raise smaller rounds from local and regional investors who understand the market. 5) revenue-based financing for businesses with predictable revenue.

12/ 6) Bootstrapping. Yes, really. A bootstrapped SaaS in Nairobi selling to SMEs at shilling prices is not a unicorn story. It is a business. We need more businesses.

13/ For developers: the winter means fewer startup jobs and more remote jobs with foreign companies. That is not all bad. It is how many senior engineers here got trained and paid properly.

14/ For founders: if your plan needs a Series B in 18 months, plan as if it will not come. Default alive, as Paul Graham put it years ago.

15/ For investors: the founders who built through the winter are the ones you will want when it warms up. They learned to make money. That habit does not go away.

16/ Sources: the annual reports from Partech Africa, Briter Bridges and Africa: The Big Deal, and the news coverage of each shutdown at the time. Pole to every founder who closed a company in the last three years. You are not a failure. You were early to a cold winter.