10: Game Over For Startup Seed Funds?

10: Game Over For Startup Seed Funds?

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Nigeria's "company that builds companies", Spark, announced last week its plans to drop some startups it invested in.

This announcement comes just a week after 88mph's notice that it will be "taking a break" from investing in African startups.

While it is not uncommon for investment funds to pause on-boarding when funds available for employment are temporarily exhausted, it seems odd that 88mph would go out of its way to alert the public to something that would occur in the normal course of business.

Similarly, given how startup failure is not uncommon - with some investment funds said to be aiming to achieve a success rate of approximately one in ten,

why would Spark ceremoniously trot these "dead businesses" out in this manner?

In this week's discussion, Tefo Mohapi and Andile Masuku ask whether the current approach to tech venture capitalism in Africa is flawed. Perhaps investors are beginning to realise that successfully investing in African startups is in fact a science that involves a lot more than throwing money at promising prospects?

Here's to hoping the investment notices by 88mph and Spark are not precursory tremors to a major shaking in Africa's tech investment scene.

Be sure to stay up to date with all the week's biggest news from across the continent:

  • Find out what major global deadline both Uganda and South Africa have missed,
  • Discover how a landmark court ruling has seen South African billionaire Mark Shuttleworth lose $20 million,
  • Get details on an ambitious cable car project in Kenya which promises to alleviate Nairobi's traffic congestion, and
  • Learn more about a 3D-printed prosthetic hand which promises to put South Africa on the map in terms of medical innovation.