Africa’s tech ecosystem is often judged by the standards of fully mature markets, from billion-dollar exits to deep growth-stage capital, and a constant stream of IPO headlines. By these metrics, it appears to be lagging.
But on a closer look, the data reveals a very different reality. Africa is not lagging; it is simply early. Too often, the continent is judged using the playbook of the U.S. in 2025 rather than the realities of an ecosystem still in its formative stages. In truth, Africa is progressing through the same foundational phases that every resilient innovation economy has experienced on its path to maturity.
Entrepreneur and seasoned investor Ido Sum, formerly a partner at TLcom Capital, has shared a data-driven reflection on the true state of Africa’s tech ecosystem. In his analysis, he explains that while it may be tempting to compare Africa’s progress to the fully mature venture capital environments, doing so paints an inaccurate picture.
Instead, he argues that Africa today mirrors what the U.S. looked like in the 1970s–80s, and Europe and India in the early 2000s, ecosystems that were still young, experimental, and slowly building trust with capital providers.
Sum notes that early-stage markets everywhere are characterized by small funds, modest rounds, very few unicorns, and exits usually ranging between $25 million and $300 million. This is a universal pattern seen in the early days of every major tech ecosystem, including Silicon Valley, China, India. Africa’s present trajectory, he asserts, fits perfectly into this historical pattern. The ecosystem is not underperforming; it is simply in its early chapters.
To illustrate this, Sum examines the “conversion funnel” of startups advancing through funding rounds. In the United States, for example, roughly half of the companies that raised Seed funding between 2008 and 2010 went on to Series A, and about 30% achieved an exit within ten years. Africa’s data, however, tells a different story. Between 2019 and 2022, 582 African startups raised pre-seed or seed funding.
Only about 26% secured any follow-on round, 16% reached Series A, 4.5% reached Series B, and less than 1% made it to Series C and beyond. When an additional 500 companies with later-stage starting points are included, the overall outcomes remain similar. The funnel tightens dramatically after Series A, mostly due to the limited availability of growth-stage capital on the continent.
The exit landscape supports this trend as well. From 2015 to 2025, Africa recorded just over 20 tech exits valued above $50 million, totalling around $5 billion in disclosed value. These companies raised an average of $250 million in equity and debt before exiting, with a typical journey taking around 10.5 years.
Most exits were strategic acquisitions, while IPOs remained rare. The majority of outcomes sat within the $50 million–$150 million range, with a few notable exceptions such as Paystack, DPO, and InstaDeep. Sum emphasizes that these numbers are not signs of a failing ecosystem. Instead, they reflect what early-stage markets everywhere experience before breakout success stories become routine.
He argues for a realistic, yet optimistic, approach to venture investing in Africa. Fund managers, he suggests, should align their expectations with the market’s current stage. Rather than designing strategies around billion-dollar IPOs, they should build funds sized between $20 million and $75 million that can thrive on $100 million–$200 million exits outcomes far more likely in the near term.
He further points out that Africa lacks the non-equity support frameworks that helped other regions grow, such as R&D grants, working-capital instruments, and large-scale venture debt. Many African startups face a financing landscape where equity angel rounds, VC series, and the expectation of dilution carries an outsized share of growth capital.
That happens because complementary, non-equity instruments that grease other ecosystems (direct R&D grants, generous R&D tax credits, predictable working-capital facilities, large-scale venture debt, credit guarantees and long-term local institutional capital deployed to SMEs) are limited or uneven across the continent. The result, a steeper funding funnel, risk-intolerant investors, and slower commercialization of capital-intensive innovation.
In Sum’s view, none of this is cause for discouragement. Instead, it is a call for investors, founders, and policymakers to treat Africa as “early, not broken”, and to design capital structures, exit pathways, and market expectations that match the continent’s current stage of development.
