The African technology ecosystem is witnessing a rapid shift as accelerators increasingly transition into full-time venture capital firms(VCs). With a thriving, dynamic startup landscape, African accelerators that once focused solely on mentorship and initial funding are now raising substantial VC funds to support startups from seed stages through to growth and exit. This trend is enabling a growing number of African tech startups to secure critical funding at later stages, addressing a long-standing gap in the market.
The Shift: From Accelerators to VCs
Historically, African accelerators played a pivotal role in providing early-stage funding, mentorship, and resources to young startups. Programs such as those run by Norrsken Accelerator, Savannah Fund, and Flat6Labs were instrumental in nurturing Africa’s nascent tech ecosystem. Today, these accelerators are moving to a VC model, raising large growth-stage funds that provide significant capital, technical guidance, and networking opportunities — aimed at scaling African businesses for international markets.
Stockholm-based Norrsken Accelerator, originally focused on funding social-impact ventures globally, is a prime example. Founded in 2016 by Klarna co-founder Niklas Adalberth, Norrsken initially served as a platform to connect impact-focused startups with critical resources. Now, the accelerator has expanded its African presence through Norrsken22, a Pan-African VC firm that recently closed its debut $205 million fund. This move marks a shift towards traditional VC operations, with a focus on high-potential, scalable startups in sectors like fintech, edtech, and health tech across the continent.
Norrsken22’s fund will focus heavily on Series A and B rounds, allocating approximately 50% of its capital to initial investments and reserving the remainder for follow-on rounds. “Our goal is to help startups grow beyond their borders and support them with deep local insights,” said Natalie Kolbe, managing partner at Norrsken22, noting the firm’s on-the-ground teams in Kenya, Nigeria, South Africa, and Ghana. “As liquidity tightens globally, larger checks and follow-on commitments are essential in this region.”
The trend extends beyond Norrsken22. Other notable African accelerators such as Savannah Fund, Flat6Labs, and Antler East Africa have also pivoted to VCs, raising new funds that are explicitly targeted at growth-stage investments.
Savannah Fund, one of Africa’s earliest VC firms, launched a $25 million fund in 2021, focusing on supporting women entrepreneurs and high-growth sectors across sub-Saharan Africa. By transitioning from an accelerator model to a more expansive VC approach, Savannah Fund has been able to double down on growth-stage investments, positioning itself as a long-term partner to tech-driven businesses with pan-African and global potential.
Flat6Labs, a leading seed investor in North Africa, recently launched a $95 million Africa Seed Fund (ASF) to invest in early-stage tech startups across the continent. Headquartered in Egypt, the ASF is poised to invest in over 160 startups over the next five years, with ticket sizes ranging from $150,000 to $500,000. General Partner Ramez El-Serafy commented, “The new fund enables us to expand into more territories like Nigeria, Ghana, Kenya, Morocco, and Senegal, fostering growth in impactful sectors such as health tech, fintech, and climate tech.”
The strategy allows Flat6Labs to play a more significant role in scaling startups, offering follow-on rounds that exceed the capabilities of a traditional accelerator. By adding a venture capital component, ASF now has the flexibility to support portfolio companies through multiple rounds, bridging the critical funding gap from seed to growth stages.
Bridging Funding Gaps in African VC
Africa’s tech sector has seen a rapid expansion, with venture funding reaching between $5 billion and $6 billion in 2022. However, funding levels have since slowed, partly due to global economic headwinds. In 2023, African VC funding dropped to an estimated range of $2.5 billion to $3.4 billion, according to data from The Big Deal and Briter Bridges. This decline has underscored the urgency for locally-led funds to fill the funding void left by international investors.
“Africa’s startup ecosystem still faces significant funding shortages, particularly in Series A and B rounds, which are critical for companies looking to expand,” explained Kolbe. “By transitioning to a VC model, accelerators can provide the larger checks and follow-on funding that local investors have often lacked.”
The scarcity of late-stage funding has often forced promising African startups to seek acquisitions or early exits, limiting their potential. With the growth of African-led VCs, startups now have a more viable path to scale within the continent, retaining local ownership and potentially reaching IPO stages.
Targeting Pan-African Scale and Exit Strategies
For many African-focused VC firms, transitioning to the VC model comes with thinking mostly like VCs. Hence, the goal is not only to support local startups but to help them scale to pan-African markets and achieve exit opportunities through acquisitions by international firms or partnerships with African industry leaders. And they are devising strategies for that too. Firms like Norrsken22 and Flat6Labs have structured their funds to provide this pathway by backing scalable, high-growth sectors and establishing extensive advisory councils comprised of business leaders from multinational corporations operating in Africa.
“Strategic exits, whether through local market consolidation or acquisition by larger global companies, are crucial,” said Kolbe. By helping startups anticipate potential exit opportunities from the outset, Norrsken22, like many other VCs, aims to increase the attractiveness of its portfolio for international strategic buyers and local industry leaders alike.
Challenges and the Path Forward
Despite this promising trend, African VCs face challenges as they transition from accelerators to full-fledged VC firms. The shift requires substantial capital and operational restructuring, including building extensive local networks and expanding internal resources to support companies from early growth through to exit. Many firms, including Antler East Africa and 54 Collective, have developed hybrid models that blend venture building and traditional VC to navigate this transformation, a strategic way of retaining their roots.
Antler East Africa, for instance, raised a $13.5 million fund in 2022, enabling it to invest not only in early-stage companies but also to support startups already in operation. “We continue to build ventures from scratch, but now we also invest in established teams with a more traditional VC approach,” said Selam Kebede, director of Antler East Africa.
In addition to funding, accelerator-turned African VC firms are also addressing structural challenges that many startups face — which they had ostensibly encountered during their accelerator days — such as board formation, corporate governance, and talent acquisition. 54 Collective, formerly Founders Factory Africa, emphasizes these areas, noting that poorly structured boards and rapid spending on overheads are common pitfalls for African startups. With a new $40 million fund and an additional $107 million backing its venture support platform, 54 Collective has positioned itself as both an investor and a hands-on advisor.
The Bottom Line
The rise of Africa-focused VCs signals a pivotal moment for the continent’s tech ecosystem. As accelerators evolve into full-time VCs, African startups now have increased access to the funding and support needed to scale, both within and beyond the continent. This trend promises to strengthen the local tech ecosystem, foster innovation, and unlock exit opportunities that could create significant value for African entrepreneurs and investors alike.
While challenges remain, the rapid shift of African accelerators to the venture capital model indicates a commitment to supporting homegrown solutions for Africa’s unique challenges, promoting sustainable growth for the continent’s most promising startups.