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Africa’s startup exit landscape remains shallow because most founders are unprepared for what comes after scaling. During the State of Exits in Africa session at Moonshot by TechCabal 2025, experts Freda Isingoma, Senior Fund Manager at Octopus Investments, and Ariel White-Tsimikalis, Partner at Goodwin Procter, observed that while funding rounds have increased, exits through acquisitions or initial public offerings (IPOs) are still uncommon.
They linked this to structural weaknesses within startups. Many African founders, they said, build companies focused on immediate fundraising rather than long-term exit readiness. With poor governance, weak documentation, and fragmented ownership, these startups proliferate but leave little for investors or buyers to acquire confidently.
Why Exit Readiness Matters for African Founders
White-Tsimikalis explained that founders often prioritise short-term capital over building solid internal systems. “You have to think beyond the next funding,” she said, urging entrepreneurs to embed structure, governance, and legal compliance early on. Data from Africa: The Big Deal showed that the continent recorded only 19 tech startup exits in 2023, most through mergers and acquisitions (M&A), the most realistic liquidity path for investors in Africa’s tech ecosystem.
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Tsimikalis highlighted recurring problems in Africa’s startup exit landscape, which were disconnected legal entities across markets, poor intellectual property (IP) protection, weak boards, and a lack of governance, all of which reduce company valuation and delay exit opportunities. Building a compliant and transparent framework enables founders to define their equity story, rather than reacting defensively to investor scrutiny.
Africa’s Startup Exit Landscape: Strengthening the Exit Path for Africa’s Startups
Isingoma urged startups to plan exits as part of their growth strategy. She recommended practical paths for smaller firms, suggesting that international exchanges offer realistic options for earlier listings. Drawing attention to the UK’s Alternative Investment Market (AIM), she described it as a model that supports high-growth firms with lighter regulatory burdens.
For Africa, she added, developing deeper local capital pools, especially at Series B and C stages, would unlock better exit opportunities. A dual approach, linking local growth with international liquidity, could help startups gain investor confidence while maintaining regional presence.
In conclusion, the panel agreed that successful exits don’t just happen. Founders who plan with exit readiness in mind, strengthening governance, protecting IP, structuring equity clearly, and maintaining clean legal records, can make their companies investable both locally and globally. Africa’s startup future depends on founders who build with the end in mind.
