Africa’s startup scene is booming. Every year, we see more funding, more ambitious founders, and more companies promising to be the next big thing. But here’s the hard truth: funding alone doesn’t build a business—sustainability does.
Many startups attract millions in investment but collapse within a few years because they prioritize growth over profitability, hype over impact. So, are we glorifying the idea of startups more than the reality of building lasting businesses? Let’s explore.
Hi, I’m Innocent—your guide in the world of innovation and entrepreneurship in Africa. Lately, I’ve been thinking about something that’s been bothering me: Are we so enamored with the startup narrative that we overlook the power of building sustainable businesses?
Startups are exciting. They promise disruption, attract investors, and make headlines. But here’s the truth: not all startups build lasting impact. Some burn bright and fizzle out, while others—less hyped but more resilient—quietly shape economies and change lives.
Let’s dive into the reality behind the hype.
The Startup Hype: A Double-Edged Sword
Across Africa, startups are hailed as engines of innovation and economic growth. Every year, we see headlines about record-breaking venture capital (VC) investments—over $6.5 billion was raised by African startups in 2022 alone (Partech Africa).
We celebrate unicorns like Flutterwave, Chipper Cash, and Andela. But beneath the surface, the startup ecosystem faces serious challenges:
80% of African startups fail within five years (Startup Genome).
Many prioritize rapid scaling over profitability, often at the insistence of foreign investors.
A large number chase Western business models that don’t always fit local realities.
Consider Kenya’s Sendy, a logistics startup that raised millions but shut down in 2023. The reason? Aggressive expansion without a solid revenue model. Meanwhile, smaller logistics firms that grew gradually—adapting to the complexities of African supply chains—are still thriving.
So, what really makes a business last?
The Reality of True Impact in Africa
Africa doesn’t just need more startups—it needs more sustainable businesses. The companies that make the biggest impact aren’t necessarily the loudest or the most-funded. They are the ones that solve real problems, create jobs, and stand the test of time.
What Sets Sustainable Businesses Apart?
Deep Market Understanding – They build for local realities, not just global startup trends.
Profitability Over Funding – They focus on strong financial fundamentals, not just external capital.
Gradual, Adaptable Growth – They scale cautiously, ensuring stability before expansion.
Photo by Desola Lanre-Ologun on Unsplash
A Tale of Two African Startups
Imagine two fintech startups in Africa:
Startup A: Raises $20 million within a year, aggressively expands into multiple countries, but struggles with adoption and regulatory hurdles. Within three years, it burns through cash and collapses.
Startup B: Starts in one city, fine-tunes its model, reinvests profits, and scales methodically. After 10 years, it’s a profitable, job-creating enterprise.
Which one truly wins in the long run?
This is the difference between chasing startup hype and building a resilient business.
The Problem: Misaligned Incentives
One major challenge in Africa’s startup ecosystem is the pressure to fit into Western VC expectations. Investors often push for rapid scaling and quick exits, forcing African startups to grow faster than infrastructure and regulatory systems allow.
For example, a tech startup in Lagos might secure $5 million in funding and be expected to expand into five countries within two years. But what if infrastructure gaps, regulatory hurdles, and customer adoption take longer than expected? Without flexibility, such startups collapse under their own weight.
How Do We Fix This?
Redefine Success Metrics – Move beyond the obsession with funding rounds and celebrate businesses that achieve profitability, job creation, and long-term sustainability.
Encourage Patient Capital – Investors should support steady, scalable growth rather than expecting quick exits. More local and impact-driven investors can help shift this mindset.
Prioritize Local Solutions – Startups should be built for African problems, not just adapted from Western models. This means considering infrastructure gaps, customer behavior, and regulatory landscapes.
Strengthen Business Fundamentals – Entrepreneurs should focus on sustainable revenue models, financial discipline, and long-term customer retention instead of short-term valuation spikes.
Promote Resilient Founders – African startup culture should value grit, adaptability, and execution over flashy launches. Founders must be prepared to pivot and endure, not just scale fast.
Final Thoughts: It’s Time to Shift the Narrative
Yes, the startup culture is exciting. But Africa’s future isn’t in just more startups—it’s in businesses that last.
The question for every entrepreneur should be: Are you building for the moment, or for the long haul?
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