African startup funding has yet to recover from its 2022 peak. Seed-stage funding has fallen sharply, the path from seed to Series A has lengthened, and a growing cohort of startups are surviving month to month, increasingly unable to secure institutional follow-on capital and waiting for a consolidation wave that has been slow to arrive.
Against that backdrop, TLCOM has been quieter than usual — at least publicly. The firm closed TIDE Africa II, its second fund, in 2024, and announced several investments that year. Since 2025, however, its publicly announced deals have been relatively sparse. From the outside, the natural conclusion is that one of Africa’s established early-stage investors has pulled back.
That conclusion, according to TLCOM Principal Cyril Shonibare, is wrong.
In an exclusive interview, Shonibare spoke with Launch Base Africa’s Udoh Charles Rapulu about the gap between what TLCOM announces and what it actually deploys, why the Investment Committee is now stress-testing exit pathways much earlier in the investment process, what the collapse of Okra taught the firm about backing companies in structurally difficult markets, and why — despite the strains across the ecosystem — he remains optimistic about the trajectory of African venture capital.
Cyril, TLCOM closed TIDE Africa II at over $150 million roughly two years ago, and there was significant deal activity in 2024. Since then, publicly at least, things appear to have quietened — a handful of investments in 2025, and relatively little announced this year. What is the actual state of the fund, and how much capital remains available?
We still have sufficient dry powder for both new investments and follow-on investments, and we’re still very much in our investment period. There’s often a gap between what is announced and what we’ve actually invested, for various reasons — sometimes founders want to focus on the operations of the business and hit particular milestones before announcing a fundraising round.
All that to say: we’re still very active. We still have dry powder for new and follow-on investments. I’d say this year has actually been busier than the past, and there should be announcements about investments we’ve made in due course.
From where you sit — presenting opportunities to TLCOM’s Investment Committee — how has the IC bar shifted over the last 18 months? And what does the realistic timeline from first pitch to wire transfer look like today, given the increased selectiveness and the series of high-profile collapses we have seen across the continent?
On the Investment Committee side: as the ecosystem continues to mature and compound, our discussions and assessments of opportunities evolve with that maturity. More recently, there’s been an increased focus on exit and liquidity of the opportunities we’re looking at — making sure deal teams are more grounded in their thinking about this. It’s critical for us as investors. Our job is not only to invest in companies, but ultimately to make sure these investments are successful in delivering the outcomes our LPs seek when they invest in us.
Given the lack of liquidity in the general African VC ecosystem, IC discussions are more grounded in these considerations — with the recognition that we’re investing in early-stage companies, so the thesis behind exit won’t be as fully formed. But the thinking is still relevant.
Generally, in terms of the timeline, I’d say the period from the first discussion to wiring has not changed significantly. Some of that is driven internally and some externally.
Internally, we try to be as efficient as possible in how quickly we’re responsive to opportunities. Depending on the information available from founders and the team, and from other sources we’re gathering — we’re able to move as quickly as the information is available to us. Nothing has really shifted. If anything, we try to move as quickly as possible.
African startup funding peaked in 2022 and has not recovered. Graduation rates from seed to Series A, and from A to B, have fallen sharply. What is driving that decline — and at what point does the absence of meaningful exits stop being a timing issue and start being a verdict on the model itself?
The fall in investment activity in African VC is across the board, but I think it’s more prominent at later-stage investments. The graduation rates from seed to A, and A to B, and going forward, have fallen off sharply.
That’s a result of a few things. First, the African VC ecosystem — in terms of local investors or Africa-focused funds — is more early-stage in nature. There are few players able to write large cheques for follow-on, later-stage rounds. There’s a concentration of fund activity and investment activity at the early stage. That’s more the nature of the market.
Second, in 2021 there was more activity from foreign or foreign-focused investors coming into our markets. That capital has dried up — or concentrated on identified winners, primarily in a few key sectors. Particularly with AI, a lot of investors that came into the market are able to capture higher-growth opportunities in their domestic markets. Hence why funding to African companies has dried up in that regard.
Third, as we mentioned around exits — the full investment cycle is not just making investments or writing cheques into companies, but being able to realise those investments. That has been a challenge in the ecosystem.
So this is more characteristic of early markets. The African VC ecosystem is still very early; these companies are still early in their trajectories. The market is still evolving and compounding. I remain optimistic that we’ll find strong opportunities, and the increasing activity we’re seeing around exits and M&A in general should further improve the trajectory of the ecosystem. Good companies will always find capital for their operations and growth.
Have there been any major exits from the TLCOM portfolio — and how are you thinking about secondaries as a liquidity pathway in the meantime?
We haven’t had any major exits we can disclose at the moment. We’re still actively working on realising our existing Fund One companies, and Fund Two is still in the investment period and deploying — so we’re a little bit further away from exits in that portfolio. But Fund One companies are beginning to mature and become more exit-ready. Optimistically, we’re hoping to see more activity in this regard in the near future.
Secondaries, too, have emerged as one of the exit routes for companies. The increase in secondary activity is a positive signal, as it’s unlocking some liquidity in the market. I’d say it’s not a preferred exit route, because the upside is more limited. However, it helps de-risk investments as they mature and unlock liquidity for your investors.
It’s encouraging to see increasing secondary activity in the market. It would be great in the future to unlock M&A opportunities and IPOs, as these liquidity opportunities provide the sort of upside that we as investors seek. We’re open to realising upside in our portfolio by whatever means are available to us, but our core focus remains IPOs and M&A activity.
A significant portion of the African tech ecosystem is carrying cap tables priced at the 2021 and 2022 peak. When you encounter a company with strong product-market fit but a fundamentally broken historical cap table, how are you structuring those deals — and are realistic down rounds actually happening?
Yes, I think founders are increasingly realistic with their valuation expectations. There’s an all-round acceptance of the fact that the market was overheated in 2021 and 2022, and multiples then were a lot higher than they currently are. Increasingly, globally, we’re hearing about an “AI apocalypse” — where AI and its capabilities are driving multiples in various sectors lower. In general, valuations are taking a hit, and companies may be having to do down rounds versus where they were previously. We’ve seen that.
We’ve found creative ways to ensure the valuation hit to the company and to the founders is not as punitive — because fundamentally, we want to be good partners to the founding teams we invest in. We wouldn’t do an investment into a company where there’s a misalignment of incentives between us and the founders. They need to have sufficient incentives to continue to grow the business. We rely on them as operators; we’re not financial investors coming to operate their businesses. They need to be appropriately and adequately incentivised for growth.
So yes, we’ve seen down rounds in companies we’ve invested in, but from a founder incentive perspective, we find creative ways and structures to ensure alignment remains — so we’re not being overly punitive and jeopardising our investments.
Also, given that we’re investing primarily in early-stage companies, the real focus is on the upside and how big the company can eventually become. While valuations may take a hit compared to previous times, the focus is more on how big these companies can eventually grow. That mindset, and that shared understanding with the founding team, is very key.
You came to TLCOM having led product strategy and operations for Paystack’s card-acquiring business and having consulted for early-stage African startups. When you open a seed or Series A data room today, what does that operating background let you see that a purely financial investor might miss?
That experience enables me to understand the problems founders face in developing their products — whether that’s an engineering challenge or a resourcing challenge. I’m able to talk through those with them. Not as a technical operator, but just understanding their product roadmap, the job to be done, how that impacts customer metrics and go-to-market strategy. I can sit with founders and talk through that at a much deeper level than a purely financial investor.
I wouldn’t say that’s specifically related to the data room — it’s more about the questions and the conversations being in-depth and grounded in operations. There’s more of a shared experience there.
On signals around unit economics and retention: purely financial investors have the same lens to look at those. I don’t think I bring anything unique compared with a financial investor looking at unit economics.
Regardless of the backgrounds of each individual investor, everyone’s experience adds to our assessment process. I wouldn’t say I’m tougher than any of the others. We all have unique perspectives and ways of looking at things. My background offers my uniqueness versus the others on the team, but it’s a team sport at the end of the day. Nothing is unilaterally done.
TLCOM’s portfolio includes founders with PhDs, former investment bankers, infrastructure architects — high-calibre pedigree by any measure. How do you guard against pedigree bias in sourcing? And what qualitative signals tell you a founder is genuinely creating a new category rather than simply being early in a market someone else will eventually win?
While you mention certain credentials founders in our portfolio may have, those signals don’t mean much if the founder doesn’t have a deep understanding of the market they’re operating in and what the customers’ problems are within that market.
Ultimately, you’re trying to sell a product or service to a customer, and that customer needs to seek that product or service. Founders with a deep understanding of both the technical and commercial nuances of the market problems they’re solving is critical for us. Those discoveries come through spending time with the founders and learning from them about their expertise on the market — versus what their certificates say.
Founder quality, for us, is not just about what degrees they have. It’s a lot deeper than that.
We make sure founders are very grounded in their understanding of the problem being solved, and what the customer seeks — not just today, but forward-looking, understanding how that evolves with changes in technology, regulation and market dynamics.
Beyond looking at founders’ credentials, our due diligence seeks to understand beyond the cookie-cutter approach — beyond what the tin says. We speak to other people they’ve worked with in the past, understand how they interact with their current teams. We go a lot deeper than relying on credentials in assessing whether they’re a good fit for us as investors.
TLCOM was an early backer of Okra — Nigeria’s open banking pioneer, which raised over $16.5 million and shut down in May 2025, winding down with three years of runway still on the table and returning capital to investors. More broadly, some of your other investments have faced serious challenges. What has that experience taught you — and has it changed how you assess opportunities going in?
How we assess founders and opportunities continues to evolve with new data becoming increasingly available to us, and with the years of experience we’ve had.
Something important to clarify: VC is a high-risk asset class. Companies you invest in have the ability to be successful investments or not. In Silicon Valley there’s a power law in terms of how the VC ecosystem is shaped. In Africa, whether we follow the same power-law dynamics is being debated. But fundamentally, this is a high-risk, high-reward asset class. Not all investment outcomes will be successful, for various reasons — not just founder dynamics.
So yes, we continue to evolve how we assess and monitor opportunities before investing, and how we monitor and add value to our investments once we’re in the companies.
The size of the market opportunity and the structure of the market in which these companies play are very key determinants of success.
At the beginning, we might have been somewhat naive in terms of how tech could disrupt various industries — without consideration of the structure of the markets and the incumbents, and the shape of the payers in those markets, whether consumers or businesses that these products and services address.
With increased data and information available to us as we’ve grown within the ecosystem, there’s more consideration of those dynamics — which go beyond whether this is a good or bad founder. The market is a stronger determinant of success. Founder dynamics are important, but market dynamics — the size of the market, the size of the payer, whether that’s a consumer or a business, how things are done in the market, what incumbents are doing, what the structure of the market is — those are key determinants.
We’ve seen that some markets and some industries have been tougher to invest in than others.
TLCOM invested in HoneyCoin’s $4.9 million round in Kenya — a stablecoin payment infrastructure play. Given that TLCOM has historically been conservative with fintech, a move into stablecoin infrastructure feels like a departure. What informed that decision?
We are pan-African and sector-agnostic. We do not have a fintech or infrastructure focus as a fund. We are sector-agnostic in our strategy and investment thesis. We back what we believe to be category-defining, market-creating companies across the major African geographies.
The data would suggest otherwise — the majority of TLCOM’s announced investments have been in fintech. How do you explain that?
There’s no denying that we’ve made a number of fintech investments. But that’s more our assessment of fit within our investment thesis — not because we haven’t looked at companies in other sectors. Those have just been the opportunities that stood out versus others in other sectors. We are truly sector-agnostic and have made investments across multiple sectors.
We do assess opportunities within AI, within the AI sector, as well as clean tech and electric vehicle opportunities. But as you rightly said, the majority of investment activity — not just with us, but in general on the continent — has been fintech. That’s more about the nature of the problem set available on the continent.
TIDE Africa II closed in 2024 — before the current wave of AI and electric vehicle activity really took hold. Has TLCOM already moved into some of those spaces, even if not yet publicly?
Yes, we’ve invested in other sectors.
Back to HoneyCoin — stablecoin infrastructure sits in a significant regulatory grey zone across most African markets. What was the actual thesis, and how does TLCOM think about regulatory risk when backing companies in categories that policymakers have not yet decided how to treat?
The shift in technology, stablecoin and cryptocurrency, is a new frontier in fintech. That technology enables cross-border payments to be more efficient, particularly on the continent, where the traditional way of moving money across borders has been challenging. Stablecoins have improved that efficiency and grown in prominence — to the point last year where stablecoin flows surpassed Visa transactions globally. That’s the technological shift.
On regulation: yes, it’s a grey area. Our approach is to back companies that are sitting at the table with regulators, shaping what the regulation will look like — and that take that aspect of their business very seriously: the fact that they will become regulated entities, that they do have licences, and that they take regulatory compliance very seriously. That’s something we take very seriously in the investments we make, making sure the companies we invest in are aligned in that regard.
TLCOM is explicit that its value-add goes beyond capital — active board representation, strategic guidance, market access. From your position working directly with portfolio companies on value creation, what is the single most common operational bottleneck founders call you in to help solve? And where do investors most consistently overestimate their ability to add real value once the cheque is written?
Honestly, it’s quite difficult to say what the most common operational bottleneck is. It varies depending on the market, where the company is in its life cycle, and its growth trajectory.
In general, the founders are the experts in the businesses they operate and the markets they’re in. We see ourselves more as a partner able to support founders in realising their objectives: through our network, strategic support, understanding go-to-market strategy, or providing playbooks for navigating regulatory or operational challenges based on experiences across the portfolio.
In general, we’re partners to the founders and see them as the operators of the businesses we invest in.
TLCOM has recently expanded its footprint beyond its core Nigeria and Kenya markets — leading Flextock’s Series A in Egypt and backing littlefish in South Africa. What is driving that geographic expansion, and how deliberate is the sequencing?
Our second fund was pan-African in focus, expanding our investment activity beyond Nigeria and Kenya, where we have offices. Our recent investments in Egypt and South Africa, as well as an investment in Francophone West Africa, reflect that strategy of becoming more pan-African. That continues to be our mandate: to cast our net as widely as possible.
Given the size of our fund, some markets and the opportunities available there are more aligned with the size of the fund. But we continue to be pan-African focused and seek investment activity across the continent, not just in Nigeria and Kenya where our offices are focused.
What has investing in markets where TLCOM does not have a physical presence — South Africa and Egypt in particular — taught you about the limits of operating from Lagos and Nairobi?
I think Africa has clear diversity in its markets. Each country has a unique way of operating, and the opportunities available are more market-determined — strategies and problems for businesses and consumers across the continent differ depending on the market the companies operate in.
Obviously recognising that we may not be physically present in these markets, we try to spend as much time as possible getting to understand them — through travel, spending time with entrepreneurs on the ground, and building relationships with ecosystem players. That gives us access to entrepreneurs building companies that fit our investment thesis, and those relationships help us build our understanding of the opportunities available when we’re in these markets.
While we cannot be physically present in every jurisdiction or geography on the continent, our job is to make sure we get as much understanding as possible and build strong relationships in the markets we invest in, to help us achieve our desired outcomes.
Looking specifically at the Egypt and South Africa investments, there is an interesting pattern: they have less prominent regulatory exposure. Is there a deliberate strategy to avoid significant regulatory confrontation in newer markets, or is that simply a coincidence?
I think that’s more circumstantial than deliberate, in terms of the investments you mentioned being away from regulated spaces. It’s more consequential than deliberate. What I mentioned earlier about our approach to investments in regulated companies applies across the board, regardless of the market. We have invested in regulated entities outside our home markets — we have some of these companies in our portfolio. The examples you gave are more circumstantial than a strategy.
There is a growing cohort of African startups that are not dying but are not growing at venture pace either (zombie companies) — generating modest revenue, surviving month to month, but effectively unbackable for institutional follow-on rounds. Is real consolidation happening, or are most of these businesses destined to quietly wind down?
There are consolidation opportunities across the board. Companies you might describe as zombie companies have built strong products that could fit into larger companies’ product suites and improve the business opportunities available to the larger company — more about acquiring these capabilities rather than building them. I think we’ll continue to see these consolidation activities in that regard.
For some, those opportunities may not be available. In terms of ecosystem maturity, seeing more M&A activity and more companies deciding not to continue operating is normal and should be expected. There’s obviously a social aspect in terms of job losses, which nobody wants to see — it’s very sad to witness businesses closing. But we will continue to see more of that going forward.
For investors, it means the upside you’re seeking to realise in the company is not available. But as I mentioned, this asset class is high-risk, high-reward. VC investors are aware of the risk-and-reward profile and the bulk of return expectations available in the asset class. Hence why I mentioned it’s normal and expected.
What’s missing from a data and narrative perspective is that we haven’t seen as many successful stories within the ecosystem as one would have liked. But as I mentioned, it’s still a very early ecosystem. I continue to be optimistic that the positive outcomes we sought when funds were being raised will be realised in the near future. We’re seeing signals in that regard, and hopefully we continue to see more and more of these strong signals.
You have seen the African startup ecosystem from three distinct positions — as an operator inside Paystack, as a consultant to early-stage companies, and now as an investor. What is the gap between how founders think investors evaluate their pitch and what actually happens inside the Investment Committee?
The gap is treating investors as a monolithic group. Each fund has its own unique way of looking at deals and the opportunities available to them.
The gap I see is founders not recognising that there are many different approaches, and that it differs per investor. Making sure the message and the pitch resonate with the specific investor group you’re speaking to — understanding that investor’s or fund’s thesis, and positioning in a way that’s aligned with it. That tends to be the gap. It’s more about founders doing their diligence on the investor group they’re speaking with.
The size of the market opportunity is a very critical metric — what is the addressable opportunity available to the startup today, and going into the future, being realistic about that.
Growth metrics continue to be important — illustrating to investors that leveraging technology within a space to solve a problem compounds and yields the high-growth opportunities investors seek.
Finally, from a unit economics perspective: the founder exemplifying that this is not just a growth-at-all-costs opportunity, but that the business is able to grow in a sustainable manner by maintaining strong and positive unit economics.
Those, in general, are ways that help communicate or address the gap between perception and what investors seek when positioning their businesses.
Looking at your portfolio, there seems to be a stronger orientation toward B2B than B2C. Is that a deliberate thesis, or a reflection of where the African market is right now?
The B2B opportunity has tended to fit more within our investment thesis, but we have made investments in B2C companies as well.
The African consumer class is being challenged. I’m based in Nigeria, and consumer spending power there over the last couple of years has been negatively impacted by devaluation, petrol prices and so on. So B2C companies and their propositions are a little bit more challenged than B2B, because consumer spending power has been impacted. There are other countries on the continent that have had similar macroeconomic headwinds that have not supported B2C propositions.
But over the course of a fund life, trends that exist today, at the beginning of the fund life, will not be the same in five years.
Finally — we are seeing a lack of new funds, reluctance to invest in Africa, limited pre-seed activity, and funds that have reached the end of their deployment cycles. Are you genuinely concerned about the trajectory of the African tech ecosystem over the next five to ten years?
No, I’m not concerned. I’m optimistic about the future of the African tech ecosystem.
I hate to sound like a broken record, but I’ve mentioned a few times that we’re very early in our trajectory. If you compare where we are today to where other ecosystems were at this point — 10 or 15 years in — we’re about where we should be. The activity we’re seeing in terms of later-stage rounds and exit activity is increasingly happening.
Capital will flow to where the opportunities are. There are strong opportunities within our ecosystem, strong companies being built, and the success of those companies will continue to fuel the African tech ecosystem. The problems are large, and the opportunities available to us are large. African consumers and businesses still need digital solutions. I’m optimistic the ecosystem will continue to compound in that direction. It’s happened everywhere else. Africa is not unique — we’re just early.
Cyril Shonibare is Principal at TLCOM, where he supports the firm’s investment work across sourcing, diligence, and execution, and works with portfolio companies on value creation. TLCOM manages approximately $250 million across two funds, including TIDE Africa II, and has backed companies across Nigeria, Kenya, Egypt, South Africa, and Francophone West Africa.