Africa’s Venture Capital Firm 54 Collective Faces Liquidation Amid Mastercard Grant Mismanagement Scandal

54 Collective, a venture capital firm that aimed to revolutionize investment and scale ideas to early-stage ventures throughout Africa, is currently on the edge of collapse following allegations of mismanaging over $42 million from Mastercard.

What began as a nonprofit initiative to fund African startups has spiraled into a full-blown financial scandal involving unauthorized transfers, unapproved rebranding, and thousands of questionable accounting entries.

Initially established to catalyze startup growth in Africa, the firm is accused of rerouting $4.59 million to its for-profit affiliate, Founders Factory Africa, and spending nearly $700,000 on a rebrand all without Mastercard’s approval.

Recall that in August 2024, the firm announced its rebrand into 54 Collective from Founders Factory Africa, promising a bolder mission to support tech ventures across Africa through catalytic capital and tailored operational support via its Venture Success Platform. This new model offered startups between $100,000 and $250,000 in equity investments and $100,000 to $150,000 in non-dilutive funding.

However, trouble began when Mastercard Foundation started asking questions about the rebrand and fund usage. The company’s accounting books were suddenly flooded with over 2,000 “adjusting journal entries”, none of which were supported by audited financial statements. According to Condia, the incomplete documentation prompted the foundation to commission accounting audit firm Deloitte, in December 2024 for a forensic audit. What they found was alarming, gross widespread financial irregularities.

In a letter, Daniel Hailu, Executive Director for Impact, Research, and Learning at Mastercard Foundation, raised red flags about “potential for-profit activity being associated with the brand linked to charitable programs” and the apparent transfer of goodwill to non-charitable entities. The foundation also launched an internal investigation into AFV’s dealings.

By February 2025, over 40 employees at 54 Collective were hit with news of a company shutdown. This comes after Mastercard Foundation ended its partnership with the VC, as well as pulling its funding, causing a financial collapse that rippled through the venture studio, Gen F accelerator, and Entrepreneur Academy, all programs once powered by the now-defunct grant.

Court documents reviewed by TechCabal confirm that Mastercard’s decision was directly tied to 54 Collective’s rebranding in August 2024. Despite CEO Bongani Sithole’s denials of wrongdoing and claims that the agreement wasn’t terminated due to a breach, the damage was already done.

In a desperate move, the firm tried to undergo “business rescue,” asking the court for $1.2 million to cover staff salaries and $500,000 for office closures. But a South African High Court was unconvinced, calling the rescue plan “legally invalid” and pointing to a “blatant disregard for the law.”

The Court has since issued a provisional liquidation order and frozen over a dozen bank accounts held by 54 Collective at Nedbank, Standard Bank, and Investec — citing concerns of improper fund transfers. The final liquidation hearing is scheduled for August 11, but all signs point to a permanent shutdown.

Launched in 2018, 54 Collective had invested in more than 55 tech startups across the continent, including well-known names like Renda, WellaHealth, and Lipa Later. Its Venture Success Platform was once hailed as a game-changer, offering personalized venture support through a team of seasoned experts.

Now, with its reputation in shambles, and a $106.5 million grant under scrutiny, 54 Collective is becoming a cautionary tale in Africa’s venture capital landscape, a stark reminder that ambition without accountability can unravel even the most promising missions.