Vangelis Kyriazis remembers the early days of Syft Analytics as a relentless grind. In 2016, juggling his own accounting practice in Johannesburg, the seeds of his future cloud analytics platform were sown from a personal frustration: the lack of sophisticated reporting tools available to smaller businesses. Unlike their larger counterparts, Kyriazis’s clients were flying blind, missing the data-driven insights crucial for informed decision-making.
The journey from identifying this gap to building a globally recognised software company, recently acquired by accounting giant Xero for up to $70 million, was far from paved with venture capital. Instead, Syft was built the hard way: through bootstrapping.
The concept of bootstrapping — starting and growing a business using personal funds, reinvested profits, and minimal external financing — is a familiar one in the often-underfunded African tech ecosystem. While Silicon Valley lore celebrates the rapid ascent fuelled by successive funding rounds, many African entrepreneurs are forced to innovate and scale through sheer ingenuity and fiscal discipline.
Yet, despite the compelling narratives, truly significant exits for bootstrapped startups on the continent remain relatively rare. While the Syft acquisition marks a notable milestone, the landscape is still dominated by ventures that eventually seek external investment to accelerate growth and compete effectively. The question then becomes: how do some African startups manage to not only survive but thrive in this challenging environment, and what are the inherent risks of going it alone?
From Excel Wizardry to Global SaaS
Kyriazis’s initial solution for his accounting clients was born out of his own experience automating reporting at a large investment bank using Excel and VBA. “Previously, it would take a week for someone to do this kind of work, but through working with Excel and VBA, I managed to extract the data with the click of a button,” he recounts. This early foray into automation laid the foundation for Syft’s core offering: a user-friendly platform that simplifies complex accounting data for entrepreneurs.
For the first three years, Kyriazis and his co-founders juggled full-time jobs, pouring their own resources and time into developing the product. This slow, deliberate approach allowed them to achieve product-market fit before significantly scaling their team. “We couldn’t go all in on software right away,” Kyriazis explains. “Growth followed a long, slow curve before we reached a critical mass of features that truly solved user problems.”
This patient approach, coupled with a deep understanding of their target market — accountants and small businesses — proved crucial. Syft focused on providing actionable insights beyond traditional financial statements, incorporating customer and product data to empower business owners. Keeping development in-house from the start also ensured a tight grip on the product vision and fostered a deep understanding of the technical intricacies.
The Power of Community and Cash Flow
Across the continent in Nigeria, Douglas Kendyson, founder and CEO of Selar, a digital marketplace for creators, echoes a similar sentiment of early self-reliance. Founded in 2016, Selar has grown impressively, processing billions of naira in payouts to creators. By 2024, the platform boasted 1.5 million users and facilitated nearly ₦10 billion (over $6.5 million) in transactions. Remarkably, Selar achieved this growth largely through bootstrapping.
Kendyson admits that early on, he fully intended to raise venture capital. However, the comfort of being cash-flow positive and the desire for autonomy led him down a different path. “Laziness kicked in and bootstrapping just felt more comfortable to me,” he jokes, before acknowledging the trade-offs, particularly in terms of speed of growth and access to networks.
Selar’s winning formula appears to lie in its deep understanding of the African creator economy and a relentless focus on its users. Kendyson personally spoke to thousands of creators over five years, constantly iterating the product based on their feedback. This customer-centric approach fostered a strong sense of community, turning users into passionate advocates.
Furthermore, Selar’s business model is inherently scalable and cash-flow positive. By providing tools for creators to sell digital products, the platform generates revenue with each transaction, creating a sustainable engine for growth. This contrasts with many VC-backed startups that often prioritize rapid user acquisition and market share, even at the expense of immediate profitability.
Bootstrapping, however, is not without its challenges. Kendyson points to 2021, a peak funding period, as a particularly difficult time for hiring talent. “Everyone was getting funded well and tech salaries were high, especially for bootstrapped companies like ours that had small budgets,” he recalls. Competing for skilled engineers and product developers against well-funded rivals can be a significant hurdle for startups operating on a shoestring budget.
Another African startup that initially navigated this tightrope is Shuttlers, a Nigerian tech-enabled scheduled bus-sharing service founded by Damilola Olokesusi in 2016. For several years, Shuttlers bootstrapped its way to over $1 million in annual revenue (save for random grant funding), even launching without a fully functional mobile app, relying instead on unconventional online strategies like Slack and WhatsApp to engage early customers.
Olokesusi’s unwavering focus on her customers proved pivotal. “My customers are my best friends, not investors,” she stated. “They are the ones that will ensure you have payroll.” This dedication fostered strong customer loyalty and provided crucial feedback for product development. Shuttlers eventually attracted $1.6 million in seed funding in 2021, followed by a further $4 million in 2023, demonstrating that bootstrapping can be a viable path to proving a business model and attracting later-stage investment.
The Big Danger: Industry and Influence
While the stories of Syft, Selar, and early-stage Shuttlers offer inspiring examples of bootstrapping success, the case of Senegal’s Wari serves as a big lesson in not courting external investors, highlighting the significant risks involved, particularly in certain industries.
Launched in the late 2000s, Wari was a pioneer in the Senegalese mobile money market, even predating Orange Money. It built an extensive agent network that proved foundational for the sector’s growth. By 2019, Wari boasted operations across over 50 countries, processing billions of euros in transactions. This impressive growth was largely achieved through bootstrapping and bank financing.
However, Wari’s reliance on this model may have ultimately hindered its ability to adapt and compete. According to Tijan Watt, head of Dakar-based Wuri Ventures, Wari remained “essentially a bootstrapped and bank-funded company, with no valuation and no liquidity for their equity.” This lack of institutional VC investment may have contributed to strategic missteps and internal vulnerabilities. Last December, Wari’s founder Kabirou Mbodje was jailed and fined $8 million for criminal breach of trust.
The mobile money sector in Africa is often characterized by intense competition and, at times, significant regulatory and political influence. A Lagos-based founder, speaking anonymously, highlights this “big danger in the room”: “It could be dangerous building without influential external capital. You could be squeezed out by sudden changes by unfriendly and ruthless government or even competitors who have the capital and the influence to manipulate their way.”
In such highly contentious industries, the backing of institutional investors can provide a crucial buffer against external pressures. An investor might have the leverage and relationships to navigate complex regulatory landscapes or to push back against anti-competitive practices in a way that a purely bootstrapped company might not. Wari’s later struggles and eventual demise emphasize these potential limitations of bootstrapping in sectors where deep pockets and political connections can be decisive factors.
The Bottom Line
Despite the inherent risks, bootstrapping remains a vital pathway for African entrepreneurs. The lack of readily available venture capital often necessitates a focus on profitability from day one, fostering a culture of financial discipline and resourcefulness. As Kyriazis notes, “In South Africa, we don’t have the luxury of easy venture capital funding… we have to bootstrap and focus on profitability from day one.”
This necessity can be a strength, forcing founders to build sustainable business models and to truly understand the fundamentals of their operations. Moreover, the often challenging operating environments across the continent breed resilience and adaptability — qualities that are invaluable for any startup, regardless of its funding strategy.
The success stories of Syft and Selar, alongside the early traction of Shuttlers, demonstrate that African ingenuity and a relentless focus on customer needs can indeed pave the way for significant achievements without relying on the traditional VC route. However, the trajectory of Wari serves as a stark reminder that the “big danger in the room” — the potential for external pressures and well-funded competitors to derail even the most promising ventures — cannot be ignored, particularly in politically sensitive or highly competitive industries.
Ultimately, the optimal path for an African startup depends on a multitude of factors, including the industry, the competitive landscape, and the founders’ long-term vision. While bootstrapping fosters resilience and financial prudence, the strategic backing and networks that come with venture capital can be crucial for navigating the complexities of scaling and competing in Africa’s dynamic and often unpredictable markets. The lean machine can indeed power remarkable journeys, but understanding when and why to seek external fuel remains a critical calculation for African entrepreneurs striving for lasting success.