African VC funding hit record highs in 2021 and 2022. Over $5 billion flowed into the ecosystem across those two years — driven partly by genuine excitement about the continent's digital potential, and partly by global capital looking for yield in a low-rate environment.
The predictable happened: valuations at seed and Series A inflated. Rounds that would have priced at 8–10x revenue were closing at 25–30x. First-time founders raised large pre-seed rounds without proof of anything. A handful of deals got done at multiples that made no sense by any historical standard.
Then rates rose, global risk appetite contracted, and the music stopped.
The narrative of "African VC is in crisis" misreads what's happening. Deal volume is down from peak, but activity is not absent — it's rationalised. The founders raising today are better prepared. The valuations are more defensible. The investors writing checks have genuine conviction rather than FOMO.
From where we sit at the pre-seed and seed stages, the reset has done several things that are unambiguously good:
"The reset didn't make Africa less interesting. It made it more honest — and more investable for those with the conviction to stay."
One thing the boom-and-bust obscured is that the structural gap at pre-seed and seed in Africa was never really filled. The noise of large rounds at late stages created the impression of a healthy ecosystem. But the earliest-stage capital — the checks written before product-market fit, before institutional investors are paying attention — was always scarce.
It's still scarce. And in a market where the next generation of category-defining companies is being founded right now, that's where the asymmetric opportunity lives.
The companies we're most excited about have a few things in common. They're solving problems that exist regardless of macro conditions — payroll, payments, logistics, identity. Their founders have sector-specific insight that comes from having worked inside the problem. And they're raising at stages and prices that reflect reality rather than the 2021 hangover.
The reset created the conditions we've always wanted: more signal, less noise, and founders who are building because they have to, not because capital was easy.