- VC funding in the African startup ecosystem has steadily declined in 2023, causing experts to worry about the future of the once fast-growing sector.
- With fewer investors willing to bet on the continent during the tech downturn, the funding crunch has triggered mass layoffs, slashed valuations, and the liquidation of several African startups.
- Recent news reports of mismanagement and fraud have impacted investor perception, leading to increased scrutiny and demand for credibility from local and global investors.
Shina Arogundade has struggled to secure funding for an early-stage startup that is part of his Lagos-based venture studio, Techbeaver. “A lot of the investors we spoke to in the past three months have requested that we show more traction before returning,” Arogundade, Techbeaver’s CEO, told Rest of World. He has raised funds for two other startups this year, and said there has been a shift in investors’ perspective: They now prioritize business traction over entrepreneurs’ pedigree.