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.
Alison Collier, Managing Director of Endeavor South Africa.
** The views expressed do not necessarily reflect the views of or Independent Media.
BUSINESS REPORT
