The Harmattan — or winter — winds may carry a chill, but it pales in comparison to the icy economic headwinds African startups are weathering. Faced with mounting challenges at home, a growing wave of these companies is casting its net beyond the continent, seeking refuge and opportunity in global markets. This strategic pivot, marked by calculated expansions, bold partnerships, and occasional missteps, highlights the resilience and adaptability of Africa’s tech scene as it navigates turbulent waters.
Last week, mobility fintech Moove announced its latest foray into global markets, partnering with Waymo, Google’s autonomous vehicle subsidiary. The partnership positions Moove to manage fleet operations for Waymo’s robotaxi services in Phoenix and Miami, signaling a bold step into the advanced mobility space.
This marks a critical evolution for Moove, which began as a financier for ride-hailing drivers in Lagos. The company has faced mounting tensions at home, driven by Nigeria’s economic crisis. Drivers have protested “unfavorable repayment terms,” and Moove has struggled to absorb the impact of inflation and volatile fuel prices. Ladi Delano, co-CEO of Moove, recently described the economic landscape as “unprecedented” and acknowledged the imperative to pivot globally.
Backed by over $500 million in funding, Moove now operates in 12 markets across four continents, serving more than 30,000 mobility entrepreneurs. Its partnership with Waymo may be its most transformative yet, aiming to secure a foothold in the high-growth autonomous mobility sector.
Flutterwave, Africa’s largest fintech unicorn, has also intensified its global expansion efforts. Its remittance platform, Send App, recently extended its reach to 49 U.S. states in partnership with MainStreet Bank. The service targets African diaspora communities, offering affordable and efficient cross-border money transfers.
With remittances to Africa reaching $100 billion in 2022, according to the United Nations, this segment has become a lifeline for millions of families. For Flutterwave, the diaspora represents both an economic opportunity and a chance to diversify away from Nigeria’s struggling economy.
The naira has lost 112.5% of its value in 2024, while inflation has surpassed 30%. Flutterwave’s strategy leverages the diaspora’s growing financial needs, especially as expatriates grapple with the rising cost of living while supporting relatives back home.
Learning Hard Lessons Abroad
Yet, venturing abroad is fraught with risks. Egyptian mobility startup SWVL, once lauded for its bold acquisitions, offers a good example. In 2022, SWVL acquired Mexico’s Urbvan Mobility for $82 million, signaling an aggressive push into Latin America. A year later, the company sold the subsidiary for just $12 million — a staggering 85% markdown that laid bare the perils of overextending.
Reflecting on the missteps, SWVL’s CEO Mostafa Kandil recently admitted, “We were targeting markets in America and the UK, thinking they were bigger, but we didn’t realize the challenges. It wasn’t just a market problem; it was a deeper issue. We should have known better, but we were too focused on the wrong things.” The company has since retrenched, narrowing its focus to three markets, for now: Egypt, Saudi Arabia, and the UAE. The startup’s story highlights the importance of measured growth and market due diligence, particularly when venturing into unfamiliar territories.
For some other African startups, international expansion has been transformative. Ugandan fintech Asaak, which provides productive asset loans, recently entered the Mexican market by acquiring FlexClub’s local operations. This move, facilitated by shared investors, expanded Asaak’s addressable market by 27 times.
“We evaluated expanding within East Africa but found that Mexico offered unparalleled opportunities,” said Asaak CEO Kaivan Khalid Sattar. The acquisition of FlexClub’s operations offered a ready-made infrastructure and market presence, allowing Asaak to scale rapidly.
Asaak’s success demonstrates the potential of targeted acquisitions and strategic partnerships, particularly in high-growth markets.
The preference for partnerships and organic growth over outright acquisitions is now, also, a growing trend. Startups like GoMyCode in Tunisia and Nigeria’s Altschool are opting to build from the ground up as they venture into new territories, a strategy that mitigates the risk of overpaying for underperforming assets.
The exodus of African startups to foreign markets, in part, stems from grim realities at home. Nigeria, once Africa’s economic powerhouse, has seen its GDP growth falter. The International Monetary Fund now ranks Nigeria behind South Africa, Egypt, and Kenya in GDP terms. Currency depreciation, policy uncertainty, and inflation have made it increasingly difficult for businesses to thrive.
Egypt has faced similar challenges, with four currency devaluations since 2022 undermining consumer purchasing power. These economic pressures have pushed many startups to explore markets where capital is more readily accessible, and operating conditions are less volatile.
Th Bottom Line
The pivot to foreign markets is not without its critics. While international expansion offers respite, it risks alienating local markets that remain underserved. However, for many startups, staying afloat in the face of unprecedented challenges requires bold moves and uncharted paths.
As Africa’s tech ecosystem evolves, the lessons learned from these ventures will shape its future. The question is not whether startups can succeed abroad but whether they can do so without losing sight of their roots. For now, as the Harmattan winds sweep across the continent, African startups are proving that even in the harshest of climates, they are built to endure — and to adapt.