Incredible analysis on narrative lock-in. The stat that debt now represents 42% of African startup funding vs only 5% in Southeast Asia really hits home - it basicaly shows how investors are masking risk aversion as patient capital. I've seen similar patterns in other emerging markets where the shift to debt heavy financing usually precedes either a reset or total stagnation. Your point about "impatient capital" being the antidote is spot on, tbh Africa needs founders who move fast enough to create global leverage before the ecosystem adjusts.
I think we run the risk of throwing the baby out with the bathwater. Africa needs more risk capital and still needs the patient capital that has been provided historically (impact, DFI). We do need to test the narratives surrounding the venture class and what that looks like given where global dynamics are heading. I think as the world is moving towards a multi polar world, the themes and focus will also find a home on the continent. Opportunities in industrialisation, robotics, resilience, localisation, adaptation will be areas where the venture capital industry can lead in. Maybe that looks more like the beginning of silicon Valley where there was significant investment in hardware and physical infrastructure than the software driven age we have found ourselves in.
I think we're pretty aligned. I'm not saying there's no more room for impact capital. I just believe it either needs to adopt incentives for higher risk.
Otherwise, it needs to find better wants to complement commercial risk capital vs. shaping it.
A bit long, but this paragraph summarizes the core narrative - //The underlying virtue of Africa’s population and purpose narratives was patience—a sense that Africa’s venture returns are tied to destiny rather than demand. I believe that our ecosystem’s belief in patient capital created a culture of passivity. Our funds wait for that YC invite, that Silicon Valley lead, that low valuation multiple. If patience is the virtue, then waiting is the strategy.//
My people in Israel decoded this some years ago and told me that Africa was too slow. Valuations in other markets were a means to an end and not an end in themselves. Rapid turnover of both companies and funds was a feature and not a bug, as fast iteration, aka moving fast and breaking things, led to a desired direction. Smaller ecosystems that could afford to do so successfully copied Silicon Valley playbooks after adding a twist: they bridged themselves to the world.
I agree on the new narrative of AI and how it can enable coordination at scale, but I also think this can't happen with the kind of social structures we have. There will be massive coordination efforts required and new living arrangements built to take advantage of any demographic dividend. I say this as someone who has seen $ 65 million in DFI funds squandered on skilling up 120,000 young people, only to lose them to other markets that offered better living conditions.
The real investment to be made now is in African infrastructure. China knows this, and they are doubling down on it. I have seen more infrastructure funds on the PE side than ever before. The West pulling away is going to become something they may regret later. All the political pressures in the West will only lead to further realignment within Africa.
We will see more Rwandas and more Ghanas. Places where young people can live and thrive. They will also become bridges to the world. That shift is what venture capital, in its new iteration, should start watching out for. The truth is that the old narratives were always flawed, and lies were told to raise money from people who expected speed. Speed will be possible now, but place and infrastructure will be a greater enabler of that speed than cash. It is going to cost a lot less to do a lot more.
Incredible analysis on narrative lock-in. The stat that debt now represents 42% of African startup funding vs only 5% in Southeast Asia really hits home - it basicaly shows how investors are masking risk aversion as patient capital. I've seen similar patterns in other emerging markets where the shift to debt heavy financing usually precedes either a reset or total stagnation. Your point about "impatient capital" being the antidote is spot on, tbh Africa needs founders who move fast enough to create global leverage before the ecosystem adjusts.
I think we run the risk of throwing the baby out with the bathwater. Africa needs more risk capital and still needs the patient capital that has been provided historically (impact, DFI). We do need to test the narratives surrounding the venture class and what that looks like given where global dynamics are heading. I think as the world is moving towards a multi polar world, the themes and focus will also find a home on the continent. Opportunities in industrialisation, robotics, resilience, localisation, adaptation will be areas where the venture capital industry can lead in. Maybe that looks more like the beginning of silicon Valley where there was significant investment in hardware and physical infrastructure than the software driven age we have found ourselves in.
I think we're pretty aligned. I'm not saying there's no more room for impact capital. I just believe it either needs to adopt incentives for higher risk.
Otherwise, it needs to find better wants to complement commercial risk capital vs. shaping it.
A bit long, but this paragraph summarizes the core narrative - //The underlying virtue of Africa’s population and purpose narratives was patience—a sense that Africa’s venture returns are tied to destiny rather than demand. I believe that our ecosystem’s belief in patient capital created a culture of passivity. Our funds wait for that YC invite, that Silicon Valley lead, that low valuation multiple. If patience is the virtue, then waiting is the strategy.//
My people in Israel decoded this some years ago and told me that Africa was too slow. Valuations in other markets were a means to an end and not an end in themselves. Rapid turnover of both companies and funds was a feature and not a bug, as fast iteration, aka moving fast and breaking things, led to a desired direction. Smaller ecosystems that could afford to do so successfully copied Silicon Valley playbooks after adding a twist: they bridged themselves to the world.
I agree on the new narrative of AI and how it can enable coordination at scale, but I also think this can't happen with the kind of social structures we have. There will be massive coordination efforts required and new living arrangements built to take advantage of any demographic dividend. I say this as someone who has seen $ 65 million in DFI funds squandered on skilling up 120,000 young people, only to lose them to other markets that offered better living conditions.
The real investment to be made now is in African infrastructure. China knows this, and they are doubling down on it. I have seen more infrastructure funds on the PE side than ever before. The West pulling away is going to become something they may regret later. All the political pressures in the West will only lead to further realignment within Africa.
We will see more Rwandas and more Ghanas. Places where young people can live and thrive. They will also become bridges to the world. That shift is what venture capital, in its new iteration, should start watching out for. The truth is that the old narratives were always flawed, and lies were told to raise money from people who expected speed. Speed will be possible now, but place and infrastructure will be a greater enabler of that speed than cash. It is going to cost a lot less to do a lot more.
What stood out is how you frame narrative not just as explanation, but as a constraint on which actions feel permissible.
In Africa prepaid, cash-anchored economies, people optimise for optionality, tools that allow reversal, learning, and low cost of being wrong.
Narrative lock-in becomes dangerous when systems assume inevitability and quietly push downside risk onto users.
The real unlock isn’t better stories, but designs that allow partial entry and graceful exit , then the narrative follows.