2023 was a challenging year for the African tech ecosystem, with a significant decline in venture capital funding compared to the previous record year.
This has unfortunately led many promising start-ups to close their doors. Let’s take a look at five notable tech startups in Africa that closed in 2023 and the factors that contributed to their closure:
Sendy (Kenya)
This logistics startup aimed to provide reliable and affordable delivery services across East Africa. Sendy was founded in 2014 and has seen strong growth and partnerships with major e-commerce platforms. However, it faced competition from established players and struggled to expand beyond its core markets, leading to its closure in August 2023.
Package (Nigeria)
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This cryptocurrency trading platform aimed to simplify the process of buying and selling digital assets in Nigeria. Founded in 2020, Bundle received backing from Binance and other investors. However, it was unable to sustain its growth in the face of a challenging global crypto market and regulatory uncertainties in Nigeria, resulting in its closure in September 2023.
54Gene (Nigeria)
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This genomics company aimed to unlock the potential of African genomics for research and development. Founded in 2019, 54Gene has won recognition for its innovative work in mapping African genetic diversity. However, it faced internal challenges and external pressures, including the global economic recession, which ultimately led to layoffs and a strategic shift in July 2023.
The company finally shut down in September 2023.
Paula (Ghana/Kenya)
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Fintech Dash, founded in 2019, initially showed strong growth, attracting significant investment. But it has faced regulatory hurdles, including controversy over allegations of embezzlement by its chief executive. The company, facing financial pressure, eventually closed in September 2023.
Lazerpay (Nigeria)
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This promising crypto and web3 company was unable to secure additional funding, resulting in its shutdown in April. Its collapse highlights the challenges facing crypto startups in Africa, particularly navigating regulatory hurdles and securing funding.
The closure of these startups underscores the challenges facing the African tech ecosystem in 2023. While the continent’s tech landscape still holds enormous potential, factors such as reduced funding, intense competition and regulatory hurdles are affecting the growth and viability of many promising businesses.
Despite the challenges, the African tech ecosystem remains vibrant and full of potential. With continued innovation, collaboration and support from investors and policymakers, the continent’s tech scene can overcome current obstacles and emerge stronger than ever.
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