The number of African startups raising between $100,000 and $1 million has fallen by almost half over the past six months. Husein Merchant, who leads Village Capital’s regional operations, has a straightforward explanation: there have not been enough exits to show investors that those cheques work.
Lacking empirical evidence that the previous cycle delivered, investors are holding back and waiting for clearer historical patterns before committing new capital, Merchant said.
Village Capital, a global nonprofit that backs high-impact startups in emerging markets, has a long record in African tech. It backed PiggyVest in 2017 and invested in Trade Lenda and AirSmat this month.
Village Capital does not currently have a fund of its own, Merchant says. The firm manages facilities on behalf of partners. Its newest is the Africa Ecosystem Catalysts Facility, a $4 million pilot, which has committed about $1.3 million to seven companies, five in Ghana and two in Nigeria, since its first investments in May 2026.
Originally published by TechCabal.