African startups should redefine what it means to succeed, argues Kenneth Nwakwanma, a strategic business advisor and venture capitalist with over 20 years’ experience transforming African enterprises.
In a thought-provoking commentary, he urges entrepreneurs and investors to focus on revenue milestones and long-term profitability rather than the spectacle of fundraising rounds.
“It will be great to see headlines screaming: ‘TakeMyRide hits her first $100k revenue in six months of launch,’” Nwakwanma says. “Because funding is not success. Revenue is. Profitability is. Sustainability is.”
His statement resonates at a time when Africa’s technology sector continues to attract record-breaking investor interest.
According to Partech Africa, African startups raised approximately $3.5 billion in 2024, up from $3.3 billion in 2023. Yet many of these firms are still far from profitability or even positive unit economics.
Silicon Valley’s Early Playbook vs. Africa’s Funding Frenzy
Nwakwanma highlights a fundamental contrast between the early years of Silicon Valley and Africa’s present-day ecosystem.
“In the early days of Facebook, Google, and Amazon, nobody cared about rounds,” he explains.
“They cared about product–market fit, user growth, and unit economics. The obsession with raising money came much later, with the VC boom.”
Africa, he argues, joined the global startup race during the era of “funding glamour,” bypassing the discipline that shaped many U.S. tech giants.
This rush into high-profile funding rounds has carried heavy costs for young African companies, where high interest rates, foreign-exchange volatility, and infrastructure gaps already challenge profitability.
The Cautionary Tales: Jumia, Andela, and Konga
To illustrate, Nwakwanma points to some of Africa’s most celebrated startups whose financial narratives tell a more sobering story:
Jumia, the continent’s e-commerce pioneer, raised over $1 billion and debuted on the New York Stock Exchange in 2019. Yet more than a decade after launch, the company has posted repeated annual losses and continues to chase profitability.
Andela, once the poster child for African tech talent development, attracted hundreds of millions in venture funding and achieved unicorn status. But its decision to pivot away from Nigeria highlights what Nwakwanma calls “the fragility of VC-driven scaling.”
Konga, lauded as “Nigeria’s Amazon,” raised significant capital but struggled with unsustainable operations and was eventually acquired in 2018 in what industry insiders described as a distressed sale.
“For every celebrated raise, there’s a silent graveyard of startups that never found sustainable footing,” he warns, underscoring the danger of equating capital raised with enduring value.
What to Celebrate Instead
Rather than measuring success by investor rounds, Nwakwanma advocates for recognition of tangible, customer-driven achievements. Key milestones worth celebrating according to him, include:
- First $10,000, $100,000, or $1 million in customer revenue.
- Profitable unit economics, ensuring each sale adds, not subtracts, value.
- Customer stickiness and market adoption specific to African contexts.
- Job creation and local wealth generation that strengthen communities.
“Africa doesn’t need startups that shine for three years and fade,” he asserts. “We need companies that endure for decades. The real unicorns won’t be the ones that raise $1 billion. They’ll be the ones that last 50 years.”
Long-Term Impact on Africa’s Economy
The need for sustainable businesses goes beyond the startup community. The African Development Bank reports that small and medium-sized enterprises account for about 80 percent of employment across the continent.
Startups that focus on stable revenue and profitability can play a critical role in reducing unemployment, fostering innovation, and building resilient economies.
By celebrating revenue milestones, Nwakwanma believes founders will be encouraged to perfect their product, market fit, tighten operations, and pursue scalable growth models that withstand market volatility and currency risks.
“Africa must now build with its own context and culture in mind,” he emphasizes.
A Call for Cultural Shift
Investors, media outlets, and startup accelerators also have a role to play in “flipping the scoreboard,” as Nwakwanma describes it. Instead of rewarding splashy valuations, stakeholders can highlight entrepreneurs achieving sustainable growth.
Industry analysts say this cultural shift could rebalance incentives, leading to stronger companies that survive economic cycles and inspire the next generation of founders.
With African tech funding projected to continue its upward trajectory, Nwakwanma’s message is clear: lasting impact, not the size of a funding round, should define success.
Kenneth Nwakanma is an accomplished business strategist and transformation leader with over 20 years of cross-sector experience, specializing in turning African businesses into high-performance, scalable organizations through strategic leadership, operational excellence and system-driven growth.
