Venture capital in Africa poised for measured rebound in 2025, with South Africa leading the charge
Following a 46% drop in African VC funding in 2023, 2024 showed early signs of stabilisation. According to internal valuation memos from Endeavor's Harvest Fund II, African equity funding declined just 2% year-on-year in 2024, totalling $2 billion (R36bn).
Venture capital (VC) across South Africa and the broader African continent is entering a period of cautious recovery and renewed opportunity, after two years of contraction and recalibration.
After a turbulent period in 2022 and 2023, 2024 was a year of recalibration. Now in 2025, we're seeing signs of resilience and reawakening across African venture capital. The key differentiator has been quality, due to founders who are building real businesses with disciplined capital use, strong unit economics, and scalable platforms.
Following a 46% drop in African VC funding in 2023, 2024 showed early signs of stabilisation. According to internal valuation memos from Endeavor's Harvest Fund II, African equity funding declined just 2% year-on-year in 2024, totalling $2 billion (R36bn).
This suggests the market may be bottoming out.
Quarter four 2024 was particularly strong, driven by three late-stage megadeals - TymeBank ($250 million), Zepz ($267m), and Moniepoint ($110m) - which accounted for nearly half of the continent's total funding.
While the volume of deals was still low, the return of nine-figure rounds was a key indicator that investor confidence is cautiously returning.
In South Africa specifically, funding totalled $459m, which is down from prior years, but far less volatile than in other regions. TymeBank's record-setting round helped maintain confidence, and the overall investment narrative was bolstered by the country's macro stability: moderated inflation, improved energy security, and post-election momentum boosted investor sentiment.
Looking ahead, Endeavor expects the market to slowly but steadily rebound in 2025. Globally, easing inflation and anticipated interest rate cuts are likely to unlock capital previously sidelined. This trend is expected to extend into Africa, though the continent still awaits its AI boom, which was the dominant driver of venture capital globally in 2024.
2025 won't be a return to frothy 2021 valuations, but it will be a year where high-quality African startups, especially in fintech, enterprise tech, and healthtech, regain their growth footing. We're already seeing founders shift their strategies and extending runway, focusing on breakeven, and selectively raising from aligned capital.
Endeavor's Harvest Fund II portfolio exemplifies this trend. Across 17 companies, 2024 saw average revenue growth of 49% (4 year CAGR), driven by standout performers like Tyme, Onafriq, and Sendmarc. The fund is now fully deployed, and its successor, Harvest Fund III, secured R190 million in its first close in late 2024, surpassing initial targets and drawing in blue-chip investors like Standard Bank, Allan Gray, and the SA SME Fund.
But in this cautious environment, not all capital is created equal.
What we're seeing is a flight to trusted, strategic capital. Endeavor's rules-based co-investment model, backing only rigorously vetted, founder-led companies with strong inflection points, has given investors greater confidence in a period where diligence is more critical than ever.
Endeavor South Africa continues to curate a pipeline of over 135 high-growth companies through its rigorous international selection process, positioning Harvest Fund III to deploy into a diversified and thoroughly validated portfolio across the continent.
While macro headwinds remain, Endeavor sees African innovation as a long-term megatrend. There is no shortage of talent or ambition here. The bottom-up drivers of digital adoption, financial inclusion, and youth entrepreneurship are firmly in place. What we need now is the patient capital and partnerships to fuel the next chapter of scale.
With a global network of over 5,000 mentors, deep access to capital, and a mission-driven investment thesis, Endeavor is positioning its entrepreneurs to navigate the complexities of the current cycle while building for the future.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
TimesLIVE
9 hours ago
- TimesLIVE
Petrobras aims to make Africa its main exploratory region outside Brazil: CEO
Africa By Petrobras aims to make Africa its main region of development outside Brazil, the state-run oil giant's CEO told Reuters on Thursday during a wide-ranging interview about the company's strategy. Ivory Coast has extended the "red carpet" for Petrobras to explore deep and ultra-deep waters off its coast, when it gave the company preference in buying nine offshore exploratory blocks on Wednesday, said Petrobras CEO Magda Chambriard. She added that Nigeria, Angola and Namibia have also expressed interest in working with the Brazilian giant. "We are experts in the eastern margin of Brazil," said Chambriard, citing geological similarities between the region and Africa. "The correlation between Brazil and Africa is unequivocal, so we need to go to Africa." In recent years, Petrobras has shown an interest in buying stakes in oil assets abroad, especially in Africa, as it looks to boost reserves while it faces delays in obtaining environmental permits to drill for new oil off the coast of the Amazon rainforest. Petrobras is also seeking to explore India's coast, taking part in an upcoming oil block auction scheduled for July, Chambriard said. Petrobras's plans mark a return to the African continent after the company divested assets in the region under previous governments, as part of a broad plan that made the company focus on high-productivity areas in Brazil's pre-salt fields. The plans to explore new oil fields are part of Chambriard's strategy to handle the critical task of balancing President Luiz Inacio Lula's ambitions to use Petrobras to boost the economy with delivering profits to its investors, all while contending with the global challenge of lower oil prices. Petrobras, a cornerstone of Brazil's economy, is also at the center of high-stakes tension within Lula's administration, which aims to leverage oil revenues for economic growth while showcasing Brazil, the host of the upcoming COP30 climate summit, as a champion in the global fight against climate change. The company's plans to drill for oil off the coast of the Amazon rainforest, in the Foz do Amazonas region, have faced delays in obtaining environmental permits. But Chambriard told Reuters she believes the company will clear the last step to getting a permit to drill in the region in the second half of July. Meanwhile, the company's plans in Africa have already started being implemented. In 2023 it bought a stake in an offshore oil field in South Africa and in early 2024 it purchased an interest in fields in the island nation of Sao Tome and Principe, where it hopes to drill a well this year, Chambriard said. Despite the recent efforts, Chambriard said the firm was outbid by France's TotalEnergies for a share in Galp Energia's offshore discovery in the Mopane field in Namibia. "We hope to be invited" to develop Mopane, Chambriard added, without giving further details. Lower Brent oil crude prices have pushed the company to cut costs and simplify projects in Petrobras's upcoming strategic plan for the 2026-2030 period, Chambriard said. During the firm's first-quarter earnings call with analysts last month, Chambriard had already signalled a move towards austerity, pleasing investors. But Chambriard did not clarify whether cost-cutting efforts would impact the company's investment plans. If confirmed, a retreat from investment plans could mark a stark reversal for the Brazilian oil giant since Lula took office in 2023 and pushed the company to invest more to boost Brazil's economy. The firm is set to finally widen its role in Brazil's fertiliser production, as it expects to resume operation on two plants in the states of Sergipe and Bahia by the end of the year, Chambriard said. The CEO also confirmed a Reuters report that the firm is unhappy with the current level of control it has over petrochemical firm Braskem, and is looking for changes to a shareholders agreement that could give the oil company more power in Braskem's decision-making process. Petrobras has a 47% voting stake in Braskem but has appointed four of its 11 board members and one director out of seven, representation it considers insufficient, Reuters reported last week. Petrobras has no interest in having majority control over the firm, but it wants more power over it to "guarantee synergies", Chambriard said, without providing further details. Braskem is a "very important asset", Chambriard said. But, she added, "from our current point of view, Braskem's management is not what we want".
IOL News
10 hours ago
- IOL News
Mary Baine named new Executive Secretary of African Tax Administration Forum
The African Tax Administration Forum (ATAF) has appointed Mary Baine as its new Executive Secretary, starting July 1, 2025. The African Tax Administration Forum (ATAF) has appointed Mary Baine as its new Executive Secretary, starting July 1, 2025. ATAF serves as a collaborative platform uniting African tax administrations to foster mutually beneficial discussions and capacity-building initiatives, aimed at promoting efficient and effective tax systems that support the sustainable development of African nations. The announcement was made earlier this week by Edward Kieswetter, Commissioner of the South African Revenue Service (SARS) and current Chair of ATAF.
The Citizen
14 hours ago
- The Citizen
Voting opens: Names for South Africa's Volkswagen Tera revealed
Public will have a choice of four monikers for the newcomer that will be assembled locally at Kariega plant, and go on-sale in 2027. Volkswagen has released the naming list of the four monikers set out for the South African versions of the incoming Tera. Image: Volkswagen do Brasil With the first round of updates at its Kariega plant completed, Volkswagen has released details of the monikers its new SUV will be sold under come its market arrival in 2027. Call to vote While known as the Tera in Brazil, where sales kicked-off last month, the joint venture model between Volkswagen do Brasil, Volkswagen Group Africa and Skoda India will have a name Wolfsburg's executive described as distinctly African at its annual product Indaba in February. Confirmed to be selected by the public via an online vote, the automaker's Facebook page has released four names South Africans will have to decide from, complete with their respective meanings. ALSO READ: Volkswagen completes first factory updates for 'Tera' production Falling within Volkswagen's naming convention for SUVs by starting with the letter 'T', the choice of names are as follows: Tengo : defined as a 'rich cultural significance in African language and describes qualities like strength, resilience and purpose' : defined as a 'rich cultural significance in African language and describes qualities like strength, resilience and purpose' Tavi : 'a gender natural world meaning good or beloved in Latin and also eight : 'a gender natural world meaning good or beloved in Latin and also eight Tiva : a word that 'means nature in Hebrew and is also associated with vitality, life and energy' : a word that 'means nature in Hebrew and is also associated with vitality, life and energy' Tion: 'signifies aesthetic appeal and evokes a sense of movement and change' Set to be showcased in pre-production guise at its 2026 Indaba, followed by the commencing of production soon after, the eventual name will most likely be disclosed next year in readiness for sales starting in 2027. What to expect? The long known 'third model' that will be built alongside the Polo and Polo Vivo at the factory located in the town formerly known as Uitenhage, the internally named 'MQB A0 Entry SUV' will become Volkswagen's smallest SUV in South Africa as European production of the T-Cross is reportedly ending next year. Skoda Kylaq debuted in India last year as the first of the joint venture models. Image: Skoda India First shown as the Skoda Kylaq in India last year, and then subsequently as the Tera in Brazil, the newcomer will likely the follow the former in making use of the 1.0 TSI engine that also omits the turbocharger in the latter. In the Kylaq, outputs stand at 85kW/178Nm regardless of being mated to the six-speed manual gearbox or a six-speed Tiptronic gearbox, while in the Tera, the unit makes 81kW/165Nm connected to the five-speed manual and 85kW/170Nm when hooked to the Tiptronic. A crucial model Priced from the equivalent of under R330 000 in Brazil, the MQB A0's anticipated replacing of the T-Cross comes admits the latter's discontinuation in favour of the all-electric ID.2X in Europe next year. For developing markets, this will leave it as Wolfsburg's range opener, which for South Africa, is the result of a R4-billion investment into the Kariega plant that resulted in a month-long shutdown between March and April for the installation of 100 robots, new conveyor belts in the final assembly area, and revisions to the body paint shops. More soon Although still some ways off, the revealing of the names, plus the first phase of factory readiness now being completed, points to systematically divulging of more information over the coming 18 months. As such, expect Volkswagen to disclose more details throughout 2025. NOW READ: Volkswagen halts local production in preparation for 2027 SUV
