Next Wave: Venture debt’s role in Africa’s startup ecosystem
- Decline in VC deals and a tough macroeconomic environment have posed challenges for the African startup ecosystem.
- Venture debt is gaining traction as it provides working capital without diluting ownership.
- Recent startup closures have raised concerns about the future of VC debt.
The challenges faced by the African startup ecosystem, including a decline in VC deals and recent startup closures, have raised concerns about the future of venture debt. However, there is potential for growth and success if local players, including VCs, develop technological solutions to assess and manage venture debt. Founders also play a crucial role in securing funding options, such as debt, by demonstrating clear revenue generation plans and strong financial models.
