After years of record-breaking funding rounds and celebratory headlines, a sobering reality has settled over Africa’s tech ecosystem. The venture capital winter of the past two years has now given way to a stark season of reckoning in 2025. High-profile startups, once lauded as industry pioneers, are shutting their doors at an alarming rate.
While each collapse has its own story, a closer look at the debris reveals eerie patterns. From ill-fated pivots and the curse of being first to asset-heavy models buckling under economic pressure, the failures of companies like TradeHub, Okra, Medsaf, and Kippa offer a raw, unfiltered look at the structural fragilities of building startups on the continent. These aren’t just isolated incidents; they are symptoms of a system under immense strain.
Pattern 1: The Perilous Pivot
In a healthier market, a pivot is a strategic manoeuvre. In 2025, it has often been the final, desperate act before the lights go out. Startups are finding that changing direction mid-flight, without a strong conviction or a forgiving market, is a recipe for burning through the last of their runway.
- TradeHub, the Egyptian B2B venture from Bosta’s celebrated co-founder Ahmed Gaber, is a prime example. After its initial idea of a cross-border marketplace failed to find traction over 18 months, the team pivoted to a B2B SaaS tool. When that also failed to gain momentum, they faced a choice: pivot again or shut down. They chose the latter, returning their remaining $1.4M in pre-seed capital. “We no longer had strong enough conviction in a third idea that justified the risk of continuing,” Gaber explained.
- Nigerian open-banking pioneer Okra followed a similar path. After building a formidable API infrastructure business, it struggled with monetization in a tough economic climate. In a bold but ultimately fatal move, it pivoted to launch Nebula, a local, naira-denominated cloud service to compete with giants like AWS. The gamble was too capital-intensive and couldn’t compete when AWS began undercutting prices and billing in local currency. The company quietly wound down in May 2025.
- Kippa, the Nigerian fintech that raised $14.3M, provides a cautionary tale of a pivot into oblivion. After shutting down its unprofitable agency banking business due to soaring costs of POS terminals, it announced a pivot to an AI-powered edtech platform. But since the announcement, the new website has gone offline, the co-founders have moved into new roles in the US, and the company has fallen silent, leaving investors and stakeholders in limbo.
These stories show that a pivot isn’t a magic bullet. It’s a high-stakes bet that requires as much, if not more, product-market validation than the original idea — a luxury few can afford when cash is running low and investor patience has worn thin.
Pattern 2: The First-Mover’s Curse
Being first to market is often glorified in tech, but in Africa, it can be a curse. Pioneers bear the heavy cost of educating the market, navigating regulatory grey areas, and building infrastructure from scratch. Many burn out just as the ecosystem they helped create begins to mature, leaving latecomers to reap the rewards.
- Medsaf, a Nigerian healthtech founded in 2017, is the poster child for this phenomenon. It was a trailblazer in digitising the country’s chaotic pharmaceutical supply chain, tackling the crisis of counterfeit medication. However, after raising over $2M, it collapsed quietly in early 2024 amid failed fundraising efforts, investor disputes, and unpaid employee salaries. Founder Vivian Nwakah reflected, “We were before our time. Many people followed afterwards and improved upon things that we did first.” Today, other players like Lifestores Healthcare and DrugStoc are thriving in the market Medsaf helped validate.
- Okra also fits this mould. It was instrumental in pioneering the concept of open banking in Nigeria, building the foundational APIs that connected bank accounts to apps. But it struggled to effectively monetize this infrastructure before the market and the Central Bank’s official regulations could catch up. It built the roads but couldn’t survive long enough to profit from the traffic.
The lesson is stark: innovation alone doesn’t guarantee survival. First-movers often absorb the market’s initial friction, making it easier for better-funded or more operationally sound competitors to succeed in their wake.
Pattern 3: The Asset-Heavy Trap
Business models that rely on financing and deploying physical hardware have proven particularly vulnerable. In economies plagued by currency devaluation and a reliance on foreign capital, the cost of importing and managing assets can quickly become unsustainable when funding dries up.
- French social enterprise CityTaps saw its Kenyan operations collapse into liquidation. Its model involved providing smart, prepaid water meters to low-income households via a Pay-As-You-Go (PAYG) leasing model. This required immense upfront capital to finance the hardware, a dependency that became fatal in the current VC downturn. The liquidation of its French parent company signalled a systemic collapse of the entire venture.
- SolarNow, an off-grid solar provider in East Africa, faced a similar fate. Despite raising over $29M, its model of distributing and financing solar systems and appliances across 55 branches was capital-intensive. The company is now undergoing a creditors’ voluntary liquidation in Kenya, highlighting the fragility of asset-heavy models in the region.
- Even Kippa’s fintech ambitions were curtailed by hardware costs. Its agency banking arm, KippaPay, was shut down because the sharp devaluation of the Nigerian Naira made importing POS terminals prohibitively expensive for a low-margin business.
Africa’s 2025’s biggest startup failures underscore a critical vulnerability: when a business model depends on a constant flow of external capital to fund physical assets, any disruption to the global funding climate can be an extinction-level event.
Pattern 4: How You Die Matters: Soft Landings vs. Quiet Collapses
The way a startup winds down is becoming a new indicator of ecosystem maturity. A growing number of founders are opting for transparent, responsible closures, while others end in messy disputes or simply vanish.
- The Responsible Wind-Down: TradeHub’s decision to return capital to investors is part of a positive trend, seen with other startups like Nigerian fintech Thepeer and edtech Edukoya. This approach preserves the founder’s reputational capital and reassures investors that their funds are being stewarded responsibly, even in failure.
- The Strategic Soft Landing: Kenyan fintech Raise offers a masterclass in this. After realising its cap table management software was a better fit for private equity firms than for the high-volume startup market, it engineered a transition. Its clients and mission were absorbed by its US-based investor Carta, with Raise’s CEO joining Carta to lead its expansion in emerging markets. “Sometimes finishing your mission means finding the path that takes it further than you ever could alone,” said CEO Marvin H. Coleby.
- The Messy or Silent End: In stark contrast, Medsaf’s closure was fraught with allegations of unpaid salaries and a quiet shutdown designed to avoid spooking debtors. Kippa and Okra both opted for silence, fading away without a public statement, leaving the ecosystem to piece together what happened.
How a startup fails is as important as how it operates. Transparent closures build trust and resilience in the ecosystem, while silent or contentious endings breed mistrust and uncertainty. As the African tech scene navigates this correction, the lessons from its fallen stars will be critical in shaping a more sustainable future.