On the last day of June, creditors of Zydii Limited dialled into a virtual meeting to sift through the remains of a company that once embodied the promise of Africa’s digital upskilling movement. The Nairobi-based venture, founded in 2017 by two Kenyan women to deliver localised training courses to small and medium-sized enterprises, had passed a special resolution on June 16 to wind itself up under Kenya’s Insolvency Act. A liquidator, Mohamed Mohamed Al-Maawiy of Maawiy Financial Advisory Services, was appointed. The platform, which offered more than 100 courses and had drawn pre-seed backing from investors including DOB Equity, Kua Ventures and Kaleo Ventures, had run out of options.
Zydii’s quiet collapse is not an isolated event. It sits at the intersection of two faultlines that have come to define Africa’s venture-backed start-up failures in 2026: a cluster of education and clean-technology ventures in Kenya that relied on a mix of impact capital and carbon revenues, and a wave of fintech shutdowns in Nigeria, where cross-border payment platforms have been crushed by compliance costs, thin capitalisation and an unforgiving fundraising environment.
Together, the two hotspots illustrate how the post-2022 venture capital reset has reshaped the continent’s start-up landscape. After years of exuberant funding, investors are concentrating capital in a shrinking number of companies with clear paths to profitability. Early-stage firms that cannot demonstrate sustainable unit economics, or that depend on complex regulatory approvals, are being rapidly culled.
The Kenyan edtech and climate nexus
Zydii was founded by Joyce Mbaya, a computer scientist and trainer, to bridge a skills gap that blights African SMEs. Its backers spoke of “affordable, engaging and localised training” that could transform the workforce. In 2023, a pre-seed round — size undisclosed — was meant to fuel expansion into Nigeria and South Africa. The company completed accelerators run by Greenhouse Capital and Google for Startups. Yet by mid-2026, it had become insolvent, the June 30 creditors’ meeting marking the formal start of the liquidation process.
The failure compounds a difficult period for DOB Equity, the East African impact fund that had been an early supporter. DOB spent the past year overhauling its strategy after heavy losses in logistics (Sendy) and e-commerce (Copia). Under new chief executive Karen Serem Waithaka, the fund pivoted to sustainable food, water and energy, recently backing Ugandan ceramic filter maker Spouts International. Zydii’s liquidation underscores the risk that even mission-aligned, female-led ventures face when growth stalls and follow-on capital evaporates.
More spectacularly, the implosion of Koko Networks — a Nairobi-based clean cooking company that had raised more than $100m in equity and debt, including from the Microsoft Climate Innovation Fund — exposed the lethal dependency of carbon-financed business models on a single regulatory decision. Koko’s network of 3,000 ethanol fuel dispensers served 1.5m households, but its economics hinged on selling carbon credits into compliance markets. When Kenya’s government declined to issue a letter of authorisation for cross-border credit transfers, citing concerns about credit integrity, the company’s cash ran out. In February, 700 staff were laid off, and by April administrators were seeking buyers for the intellectual property and an Indian manufacturing plant, with a price tag north of $15m.
Even now, the asset sale is a recovery exercise, with secured creditors including FirstRand Bank’s RMB division and the AfricaGoGreen Fund holding charges over virtually all assets.
Both Zydii and Koko, though operating in different sectors, shared a reliance on patient, impact-oriented capital that assumed a longer runway than commercial venture funds typically allow. When that patience ran out, and no regulatory windfall or revenue breakthrough materialised, the businesses unravelled.
Nigeria’s fintech reckoning
Nearly 4,000km to the west, a different set of pressures has been claiming Nigerian fintech start-ups. In early July, Gigbanc, a cross-border payments platform for freelancers and remote workers, told customers it was winding down operations after failing to secure new funding. Founder Paul Okundaye said the “current funding environment has made it difficult to continue operating independently”. The company is in talks to be acquired by an unnamed fintech infrastructure provider, a sign of the consolidation wave sweeping the sector.
Gigbanc’s fate was echoed in May by Chimoney, a payments API business founded by Nigerian-Canadian entrepreneur Uchi Uchibeke. Despite backing from Techstars Toronto and about $1m in total funding, the start-up stopped all transactions, citing weak distribution, flat revenue and the crushing weight of compliance costs across multiple jurisdictions. “Under $1 million is too thin for a venture-scale fintech across multiple jurisdictions,” Uchibeke said, adding that he should have either raised “meaningfully more or bootstrapped properly with a profitable beachhead”.
Chimoney’s parent company retains a Canadian payment service provider licence in dormant status, but the collapse has forced dozens of businesses to migrate to alternative payment rails. It also exposed the fragility of an ecosystem where many companies rely on thinly capitalised start-ups for critical financial infrastructure. The startup has since found a new home at CapitalSage Vantage Limited.
Nigeria’s fintech sector still attracts the largest share of venture capital on the continent, but investors are now overwhelmingly favouring larger, later-stage players. The shakeout has been brutal for early-stage cross-border payment firms, which must fund licensing, compliance, treasury management and customer acquisition simultaneously — often across dozens of currencies and regulatory regimes — long before they reach break-even scale.
A continent-wide reset
The failures in Kenya and Nigeria are not merely local stories. They reflect a structural shift in how venture capital interacts with African markets. The era of plentiful seed rounds and blitzscaling, fuelled by near-zero global interest rates, ended in 2022. By 2026, even as aggregate funding volumes have shown modest improvement, deal counts have fallen and investor participation has narrowed. The capital that is deployed is going to companies that can demonstrate rigorous financial discipline.
“Investors have become selective, favouring businesses with stronger paths to profitability and sustainable unit economics,” one Lagos-based venture partner noted in an email to Launch Base Africa. Mergers and acquisitions are becoming the default exit for ventures that built valuable technology or customer bases but never achieved standalone viability. Gigbanc’s potential sale into a larger infrastructure company is the model; Koko’s fire sale of patents and machinery is the warning.
For the impact investment community, the dual hotspot phenomenon is particularly sobering. Zydii and Koko were darlings of the development-finance circuit, held up as examples of how patient capital could back African founders solving real problems. Their failures will intensify the debate over whether the venture capital model — with its demand for exponential returns — is the right instrument for essential services like skills training or clean cooking. DOB Equity’s pivot towards more traditional business models suggests one possible answer: link impact to tangible, recurring revenue from day one.
As liquidators sift through the assets of Zydii and administrators market Koko’s ethanol technology, and as Gigbanc’s customers race to move their dollar balances before the July 31 deadline, Africa’s start-up ecosystem is absorbing a hard lesson. Innovation without resilience, and mission capital without a path to commercial viability, is a recipe for a crowded creditors’ meeting.