Venture capital 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.
This is according to Alison Collier, MD of Endeavor South Africa, who shares insights into the evolving investment climate and what 2025 holds for high-growth, founder-led businesses both in South Africa and across the broader continent.
“After a turbulent period in 2022 and 2023, 2024 was a year of recalibration,” she says. “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.
Collier says this suggests the market may be bottoming out.
“Q4 2024 was particularly strong, driven by three late-stage megadeals – TymeBank ($250-million), Zepz ($267-million), and Moniepoint ($110-million) – 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 $459-million, 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,” Collier notes. “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% (four-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.
While macro headwinds remain, Endeavor sees African innovation as a long-term megatrend. “There is no shortage of talent or ambition here,” Collier says. “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.”