African Startup Closures Linked to Funding Challenges, Venture Capital Decline, Nigeria

Numerous startups across seven African countries have faced closure in recent years, with Nigeria leading the pack. Despite being heavily funded, many of these businesses ultimately shut down due to various challenges in the market. The lack of liquidity, difficulties in raising capital, and a more selective approach by venture capitalists have all contributed to this trend. In the first half of 2023, funding by venture capitalists almost halved, reflecting waning investor enthusiasm amid rising interest rates. According to Startupgraveyard.africa, a total of 53 startups have ceased operations, with Nigeria alone accounting for 25 closures. Sectors affected include fintech, health, e-commerce, logistics, agriculture, transportation, and media. While underfunding is often cited as a reason for startup failures, recent cases like Pivo in Nigeria and Dash in Ghana highlight internal conflicts and mismanagement as contributing factors. Moving forward, conducting thorough due diligence before investing in startups is recommended to avoid future closures and safeguard investor funds.