Building a startup in Africa is no small feat. The continent’s entrepreneurial ecosystem is vibrant but fraught with challenges, from funding gaps to infrastructural deficits. Yet, one often overlooked challenge is the frequency with which African co-founders leave the companies they helped create. From Egypt to South Africa to Nigeria, co-founder exits are becoming increasingly common, raising questions about stability and governance in Africa’s booming startup scene.
In 2020, Nigeria witnessed a high-profile co-founder exit when Etop Ikpe, CEO of Cars45 — a leading digital automotive platform — abruptly resigned from the company he co-founded in 2016. Barely a month later, Ikpe launched Autochek, another auto-tech platform that has since raised $16.5 million across two funding rounds, backed by notable investors such as TLcom Capital and 4DX Ventures. His departure highlights a recurring trend: co-founders leaving to pursue new ventures, often leveraging the experience and networks gained from their previous roles.
Egypt’s startup ecosystem appears particularly dynamic, with co-founders frequently transitioning between ventures. Ahmed Nouh, co-founder of the Cairo-based B2B e-commerce platform Capiter, left his logistics business to join SWVL in 2017, only to resign two years later to launch Capiter. Similarly, Ahmed Sabbah, SWVL’s former Chief Technology Officer, left in 2021 to co-found Telda, Egypt’s first digital bank. Egyptian fintech startup Cassbana also faced a co-founder exodus during a critical period recently. Co-founders Mohamed Tarek and Mostafa Barakat departed to launch new ventures after the company temporarily paused operations.
Regional Variations in Co-Founder Tenure
Extensive data analyzed by Launch Base Africa reveals regional differences in co-founder tenure across the continent. Egyptian co-founders typically have shorter tenures (1–2 years), while Nigerian co-founders often show long-term commitment, with many remaining at their startups for five years or more. South African co-founders fall in between, displaying a mix of both long-term dedication and shorter stints.
These regional disparities may reflect varying levels of ecosystem maturity, access to funding, and cultural attitudes toward entrepreneurship. In Egypt, for instance, high turnover rates could indicate a more fluid job market, where founders are quick to seize new opportunities. In Nigeria, longer tenures may reflect a greater emphasis on stability and long-term growth.
The reasons behind co-founder exits are multifaceted. Most departures stem from the pursuit of new ventures, as founders seek to apply their experience to fresh challenges. Others arise from internal conflicts, such as disagreements over company direction, equity splits, or management styles. Cultural differences and leadership philosophies can also create friction, prompting co-founders to part ways.
Funding constraints and market conditions further complicate matters. Economic downturns or shifting consumer trends can destabilize startups, leading some founders to explore alternative opportunities.
The Legal and Financial Implications of Co-Founder Exits
Co-founder departures often raise complex legal and financial questions, particularly regarding equity vesting and founder agreements. A crucial question arises: What agreements did co-founders sign when establishing their companies?
Vesting schedules — contracts that dictate when founders fully own their shares — are critical in these scenarios. If a co-founder exits prematurely, their unvested shares may be forfeited or redistributed to the remaining team to ensure continuity. Typically, vesting schedules span four years. The fact that many founders leave before that ‘mostly common’ period raises questions about the effectiveness of existing share ownership structures.
As Africa’s startup ecosystem matures, the importance of such legal safeguards cannot be overstated.
The Bottom Line
Co-founder exits are a double-edged sword. On one hand, they reflect the dynamism of Africa’s entrepreneurial landscape, where founders continuously seek new opportunities and push boundaries. On the other hand, they can undermine business stability, particularly when they occur during critical growth phases.
The ability of startups to navigate these transitions will be a key determinant of their long-term success. Strong governance, clear legal agreements, and strategic planning are essential to ensuring continuity and minimizing disruption. As Africa’s startup ecosystem continues to evolve, co-founder exits are likely to remain a recurring theme — one that underscores both the challenges and opportunities of building businesses on the continent.