Several African startups faced significant turbulence in 2024. The collapse of several prominent ventures has raised pressing questions about the sustainability of growth-at-all-costs strategies and the structural challenges of operating in emerging markets. This article explores the stories of these fallen startups, their rise, and what their failures mean for the future of African tech.
iProcure: A Redemption in Progress
iProcure, once a flagship of East Africa’s agritech sector, was placed under administration in April 2024. In August 2022, the company secured $10.2 million in Series B funding, raising hopes for further expansion across East Africa. Despite its collapse, the company has taken steps toward a revival by reacquiring its core technology. Co-founder Stefano Carcoforo reflected on its journey at a Mercy Corps AgriFin event, offering valuable insights into its challenges and aspirations.
Founded in 2012, iProcure aimed to modernize Kenya’s agricultural supply chain through mobile technology. Expanding across three countries, the company served over one million farmers through 7,000 dealers, generating $14 million annually. However, over-reliance on the fertilizer market and mounting operational costs led to its financial downfall. Despite this, iProcure’s technology remains operational, offering hope for a leaner and more focused comeback.
Copia Global: Scaling Too Soon
Copia Global’s Chapter 7 bankruptcy in May 2024 marked one of the year’s most dramatic collapses. The e-commerce platform, lauded for its innovative model of enabling rural commerce via local agents, struggled to reconcile its ambitious scaling efforts with the realities of rural markets.
Raising over $120 million, Copia expanded its footprint across Kenya and Uganda. However, high operational costs and an over-dependence on continuous capital infusions left the company exposed when funding sources dried up. With liabilities exceeding $45 million and attempts to save its Kenyan unit failing, Copia’s journey ended abruptly, leaving investors and analysts to ponder the risks of premature scaling in emerging markets.
Gro Intelligence: A Data Pioneer’s Demise
Nairobi-founded Gro Intelligence, an agricultural data platform, shut down operations in June 2024 despite raising $115 million in funding. Founded in 2012 by Sara Menker, Gro Intelligence was hailed as a revolutionary force in agriculture, aggregating data to provide actionable insights. TIME Magazine even recognized it as one of the most influential companies of 2021.
However, the company’s ambitious vision struggled to translate into sustainable revenue. Legal and operational challenges compounded its difficulties, forcing its closure. The uncertain fate of Gro’s intellectual property underscores the importance of aligning technological innovation with robust business models.
MarketForce: Growth Without Sustainability
MarketForce, the Kenyan B2B marketplace known for its RejaReja platform, ceased operations in April 2024. After successfully navigating pandemic challenges and expanding to five countries, the startup facilitated nearly $160 million in gross transaction volume. Yet, economic pressures and failed funding commitments led to its untimely demise.
Co-founder Tesh Mbaabu emphasized the necessity of prioritizing profitability over rapid expansion. MarketForce’s founders have since launched Chpter, an AI-driven social commerce platform, signaling resilience despite past setbacks.
Thepeer: Compliance Overlooked
Thepeer, a Nigerian API startup specializing in digital wallet integration, shut down in 2024. Despite raising $2.1 million in seed funding, compliance issues and sluggish adoption rates hindered growth. Thepeer’s downfall highlights the critical importance of navigating regulatory landscapes and achieving product-market fit in fintech.
MVX: Logistics in Crisis
MVX, a Nigerian logistics and trade finance platform, succumbed to economic pressures in 2024. Initially focused on vessel chartering, the startup pivoted to freight and trade finance, raising $1.3 million in seed funding. However, currency volatility, inflation, and policy shifts eroded profitability, forcing MVX to close its doors.
Lessons from 2024
The collapse of these African startups in 2024 reveals recurring themes:
- Dependence on External Funding: Over-reliance on continuous funding left many ventures vulnerable when capital markets tightened.
- Scaling Ahead of Demand: Premature scaling exacerbated operational inefficiencies and stretched resources.
- Navigating Structural Challenges: Operating in underserved markets requires deep local knowledge and tempered expectations.
- The Value of Resilience: Despite failures, many founders have returned to the drawing board, applying hard-earned lessons to new ventures.
The Road Ahead
While 2024 has been a year of reckoning for African startups, it also offers a moment for recalibration. The continent’s startup ecosystem remains vibrant, driven by a youthful population and untapped opportunities. For investors and founders alike, the path forward involves a shift toward sustainable growth, operational discipline, and strategic innovation.
As the dust settles, these exemplary tales may well serve as the foundation for a more resilient and enduring wave of African startups.