Most African companies don’t need VC
By Muktar Oladunmade | Mar 24, 2025
Launch Africa is arguably Africa’s most active early-stage investor. The firm started investing in African startups in 2020, and by the time it had finished deploying its $36.3 million fund, it had invested in 133 startups across 25 countries and sectors, including startups like Kuda, Omnibiz, and Julaya.
“If you look at our first fund, 90% are still operational—an impressive rate for any fund in Africa,” Uwem Uwemakpan, Launch Africa’s head of investment, told TechCabal.
The firm is currently deploying its second fund and has already backed startups such as VaulFi, an Algerian fintech, and Toum AI, an artificial intelligence startup. The second fund targets business-to-business (B2B) and business-to-business-to-customer (B2B2C) early-stage startups across the continent, with cheques between $250,000 and $500,000. The fund can also invest up to $1 million cumulatively through follow-on investments in a few startups.
“We believe B2B models offer more sustainable growth, lower acquisition costs, and clearer paths to profitability in the African context,” Uwemakpan said, describing Launch Africa’s investment approach. “We actively invest across five regions, including underserved markets in Central and North Africa. Our strategy is rooted in disciplined, conservative decision-making. We’re not chasing trends or inflated valuations—we’re building a balanced portfolio with sound fundamentals.”
If you hear Uwemakpan tell it, Launch Africa was created to solve four problems in Africa’s startup ecosystem: bridging the critical gap between seed-stage funding and Series A rounds—a stage where many startups struggle and often fail to scale; bridging the knowledge gap for international investors; and creating a “more structured pipeline for Series A investors in Africa” by identifying, funding, and supporting promising seed-stage companies.
Now, Launch Africa is raising its third fund—but with a different approach. This time, the fund will follow a mezzanine structure, offering a hybrid of debt and equity financing.
“Equity—or VC funding—is the most expensive form of capital and for most founders on the continent, it’s not what they need. The real issue is the lack of viable alternatives,” Uwemakpan said.
In this interview, Uwemakpan speaks about the thinking behind the third fund and the lessons from the first two funds.
