South Africa's funded startups: where they are now
The control group: formal customers and local capital, few failures and no published profits
Every startup based in South Africa, or with South Africa as its main market, that raised a single round of — or more in —. Those years are when the money came in, not when companies failed: outcomes are followed up to —. This is the control group. South Africa's big rounds went to businesses selling into a formal economy, — of the — of them to other businesses or through them. Only — had to match a price set by informal competitors, and none built a distribution or delivery fleet, so the trap that sank distribution startups in Kenya, Nigeria and Egypt barely comes up. Of the — companies that remove a poverty premium/penalty, — are still operating. Companies with published profits: —.
Outcome by sector
Almost everything is still operating; the one failure sold transport data. Each chip is one company; failures are in red. Hover a chip for what happened.
Why South Africa looks so different
Two things set it apart. First, the customers are formal. Townships are supplied by large retail chains and established wholesalers, so there was little room for a venture-funded middleman to undercut, and the startups that do supply informal spaza shops, such as Yebo Fresh, raised rounds well below the threshold. Second, the money behind the survivors is local. A listed investor, African Rainbow Capital, is TymeBank's largest shareholder; the insurer Hollard backs Naked; Standard Bank lent rand to Planet42 and Paymenow; a local asset manager is financing Wetility's solar installations; and the listed payments group Lesaka bought Adumo. When dollar venture money dried up after 2022, these companies could raise again at home, in the currency they earn in. That is the homegrown capital stack that Kenya, Nigeria and Egypt mostly lack at this scale.
Who makes money and who loses it, by sector
Profitable means a publicly reported profit with figures, from a company that is otherwise healthy; none here qualifies yet. Operating means still running, with no published profit. Each chip is one company.
Winning and losing sectors
Bars to the left are companies that failed or are distressed; bars to the right are still operating, with profitable ones in the accent color. Sectors are ordered from most net winners to most net losers. Hover a bar for names.
Every company by name
What the winners have that the losers don't
How many companies in each group have each trait. Darker cells mean more of the group has it.
The terms, in plain words.
- Spend displacement: the product costs less than what the same customers already pay for the same need, so they redirect money instead of finding new money. This is the poverty premium/penalty being removed. In South Africa the clearest cases are low-fee bank accounts instead of big-bank charges, and monthly solar instead of rising grid tariffs and power cuts.
- Price taker: a company with no pricing power, which has to accept the price that cheaper rivals, often informal traders, have already set.
- Essential need: demand that holds up when money is tight (food, energy, transport, health, moving money). Economists call it inelastic demand.
- Asset-heavy: high capital intensity; the company owns fleets, warehouses, labs, power plants or farms.
- Asset-backed debt: borrowing secured on the thing sold or on the stream of customer payments, through repossession rights, lockable devices, or a claim on the cars or solar panels being financed.
- Recurring payments: customers pay daily, weekly or monthly, or on every transaction, rather than once, which makes revenue predictable.
- Policy dependence: the business only works while a subsidy, licence, regulation or government approval is in place, or once one arrives.
Reading the map. There is little here to separate winners from losers, and that is the finding. Almost none of these companies faced an informal competitor setting their price, so the trap that sinks distribution and logistics startups in the other three markets never came up. The one failure, WhereIsMyTransport, sold data that had few large buyers alongside a free app, the same shape as Okra and 54gene in Nigeria. The two companies that remove a poverty premium/penalty are both operating, and TymeBank is the only company here that says it is profitable. Survival in South Africa says more about the customers and the capital than about the business model, and with no published profits, it says little yet about returns.
Why they failed or stalled
Each company's main cause, and the event that finally tipped it over. The cause is what made the business fragile; the trigger is what ended it. South Africa has only one failure among companies this size, and it was not a price taker. It is the same kind of failure as Okra and 54gene in Nigeria: data with few buyers.
Who is making money
Only healthy companies that have published profit figures. No company in this sample has. TymeBank says it broke even in December 2023 and has made sustainable profits since 2024, without publishing figures, so it is counted as operating.
What the control group says about the thesis.
- The informal-price trap needs an informal market. Where customers are formal and retail chains already run distribution, the main way startups died elsewhere barely exists.
- Removing a premium still works. TymeBank's low-fee accounts and Wetility's monthly solar both replace something customers were already paying more for, and both are growing; TymeBank is the only company here claiming a profit.
- Local capital changes the survival rate. Banks, insurers and listed investors at home kept funding these companies in rand after dollar venture money pulled back.
- Survival is not proof of return. No one publishes a profit, and several companies have gone quiet. A fund should treat this sample as evidence about risk, not about returns.
All companies
Click a column to sort. The largest round is the biggest single round announced in the window.
Method and limits
Who is in. Startups headquartered in South Africa, or with South Africa as their main market, that announced one round of — or more (equity or debt) in —. JUMO is included because it is based in Cape Town, although most of its lending is elsewhere; WhereIsMyTransport because it was founded and run from Cape Town, although it was later registered in London. The window covers when the money was raised; outcomes are followed to the present. It stops where it does so that every company has had at least three years to show how it turned out. Rounds and outcomes come from press reports, linked per company in the cards.
How each company is coded.
- Poverty premium/penalty: the extra that poor households and small businesses pay for the same thing, such as bank charges, payday loans or running a generator through power cuts. C.K. Prahalad called it the poverty penalty. Yes when the product removes it, costing less than what the same customers already spend on the same need. Partial when it saves something real but sells at market price. No when it must match a price already set by low-cost informal operators. n/a when the customer is a business or a middle-class household, or the product replaces no existing spend.
- Asset intensity: High when the company owns fleets, warehouses or factories; Medium when it carries inventory, vehicles, equipment or a loan book; Low when it is mostly software and people.
- Outcome: Operating (including Adumo, bought by Lesaka), Distressed (merged on weak terms, a deep down round, or collapsed in value), or Failed (shut, administration or liquidation), as of the date shown.
- Profitable: published profit figures from a company that is otherwise healthy. A company's statement that it is profitable, without figures, is not enough.
Left out. Go1 (Australia), dLocal (Uruguay), LifeQ and RapidDeploy (headquartered in the US), Zeelo and Luno (UK), Clickatell (US-headquartered, selling worldwide), Optasia (Dubai), Teraco (a data-centre operator owned by private equity) and Cassava Technologies (a telecoms group, not a startup).
Limits. With almost no price takers, this sample cannot confirm or reject the price-taker rule; it shows mainly that the rule matters less where informal competitors are absent. Several companies have little public data and are marked so. Tyme's round is counted as its $180m Series B including the 2021 extension; Lula's round size comes from press reports and was not re-checked against a primary source. The coding is my own judgment and is open to challenge row by row.
About this research. This study is my own independent work. I did it because billions have gone into African startups, and the record of what that money built is thin. Comments, corrections and conversations are welcome: Peter Muiga, pm@curatedventures.africa.
Curated Ventures is not a fund; it's where I publish my thinking as I move into venture investing. I am open to conversations about the research, and about working together.
Share your thoughts or reach me at pm@curatedventures.africa · Peter Muiga