In August 2023, Dash, a Ghanaian fintech once lauded as a disruptor of West Africa’s payment systems, fell into controversy. Having raised $86.1 million in five years, the company’s trajectory seemed promising. However, CEO and founder Prince Boakye Boampong found himself at the center of a financial dispute when he failed to account for the disappearance of $8 million from the company’s coffers. Coupled with revelations of his $50,000 monthly salary, investors quickly lost faith. What followed was the slow unraveling of Dash, culminating in the sale of its assets and the demise of the company. The fate of Dash highlights a growing pattern in the African tech startup ecosystem — investor-driven growth at odds with founder-led decisions, often leading to failures.

This trend of friction between investors and founders is not unique to Dash. Across the continent, startups with early success and high-profile investments are buckling under the weight of financial mismanagement, overexpansion, or investor pressures.

Last week, Stefano Carcoforo, co-founder of the now-defunct Kenyan agritech startup iProcure, used a Mercy Corps AgriFin event in Nairobi as a platform to decry the external forces that contributed to his company’s downfall. iProcure had secured millions in funding and appeared to be on a stable growth trajectory. However, as Carcoforo explained, the moment they raised $10 million, a series of challenges unfolded.

“Against my advice, we publicly announced that we raised $10 million, though $17 million was reported. Seven of that $17 million was supposed to be debt, which never materialized,” he stated. The influx of capital brought with it new demands — professionalizing the business by hiring executives who were paid significantly more than the founding team. The bloated wage bill, inflated by 130%, strained the company’s resources and, according to Carcoforo, undermined the founders’ morale and cohesion.

“We were growing just fine without those new hires,” he reflected. But by then, the damage had been done. Investors’ demands for rapid growth and formalization had pushed the company into a state of unsustainable expansion, fragmenting the founding team and ultimately leading to its collapse.

This issue of misalignment between founders and investors is becoming increasingly visible across African tech. Abasi Ene-Obong, founder of Nigerian healthtech startup 54gene, voiced similar concerns in a recent public statement. Ene-Obong, whose company aimed to revolutionize genomic research in Africa, alleges that external actors sought to derail his company’s success.

At its peak, 54gene was celebrated for its potential to transform global drug discovery by focusing on African genetic data. The company’s partnerships with international research institutions, including MIT and Harvard, signaled its ambitions to become a major player in the pharmaceutical industry. Yet, behind the scenes, internal tensions and financial instability brewed.

Despite raising $25 million in a Series B round in 2021, by 2022, 54gene was facing mounting operational challenges. Mass layoffs and internal restructuring shook the company. Ene-Obong stepped down as CEO in early 2023, and his successor, Ron Chiarello, left just four months later. By mid-2023, 54gene was a shell of its former self, with most operations having ceased.

Ene-Obong later reflected on the difficulties his company faced, linking them to a broader pattern of sabotage faced by African business leaders attempting to disrupt entrenched systems. He suggested that financial mismanagement accusations were part of a larger effort to undermine his vision. While the specific reasons for 54gene’s failure remain disputed, its collapse underscores the precarious balance between founder vision and investor expectations.

In Egypt, Capiter, a B2B e-commerce startup, faced a similar fate. Founded by Mahmoud and Ahmed Noah in 2020, the startup grew rapidly, boasting a platform with 22,000 products, 1,000 sellers, and a fleet of 600 trucks. By 2021, Capiter had raised $33 million from a roster of high-profile investors, including Quona Capital, Shorooq Partners, and Accion Venture Lab. However, in 2022, the company ousted its founders amid a financial crisis that saw them accused of absenteeism during crucial due diligence checks.

Capiter’s implosion raised concerns over how a startup that had once seemed so promising could collapse so quickly. Allegations of mismanagement and embezzlement circulated, though founder Mahmoud Noah denied any wrongdoing. Speaking to Egyptian media, Noah insisted that the company’s funds had been properly used, but internal disagreements and mounting legal challenges suggested deeper operational failings.

The fall of Dash, iProcure, 54gene, and Capiter highlights a troubling pattern among African startups that once attracted significant capital and attention. While some of these failures can be attributed to founder missteps — whether through poor financial management or misguided expansion — others suggest that investor pressures and unrealistic growth expectations may be just as culpable.

For many founders, the influx of capital brings with it a set of demands that can fundamentally alter the trajectory of their companies. The need to “professionalize,” to meet investor expectations, and to scale rapidly often forces startups to abandon the scrappy, agile models that first drove their success. In some cases, these pressures lead to over-hiring, excessive spending, and the fragmentation of founding teams.

Meanwhile, the tension between investors seeking quick returns and founders focused on long-term growth is becoming a recurring theme in African tech startup ecosystem and its growing graveyard of failures. As more African startups reach the global stage, this friction is likely to intensify. For founders, the challenge will be maintaining control of their vision without succumbing to the pressures of investor-driven expansion. For investors, a more nuanced approach to growth — one that balances ambition with sustainability — may be the key to avoiding future failures.

Ultimately, the failures of these startups serves as an exemplary tale for the African tech startup ecosystem: rapid capital inflows can just as easily accelerate a company’s demise as fuel its growth. The challenge lies in finding the delicate balance between founder vision and investor expectations.