Amidst the buzz of Terra’s $11.75m dollar raise and the congratulations that has been flowing for the founders from various quarters, and even those skeptical about the possibility of a hidden agenda from the funders, a more muted question arose “Why did it take Silicon Valley to fund a major frontier market project and one that has so much impact on Nigeria’s security infrastructure? Why did the African VCs not step up?”
Eliot Pence, General Partner at Tofino Capital, a Canadian VC, points out that it is because VCs (and not just in Africa) often suffer from outcome fallacy. “They only see the future if it looks like today’s world.” As to the question of that applies in this case, he adds: “They believe that if Africa can’t build jet engines yet, they conclude that it can build anything serious. So they crowd into stablecoins and fintech rails and call it prudence.”
Stephen Deng, co-founder at DSFs Labs and one of the early backers of Terra agrees with Pence, adding that that thinking most likely led to the narrative framing Africa’s startup and investment ecosystem as revolving around two powerful ideas: a rapidly growing youth population and technology-driven solutions for social good. The narrative helped global investors make sense of a complex continent, and provided a safe area where they could exercise their prudence, so it worked. Capital flowed into fintech, e-commerce, logistics, and health technology. Africa minted 8 fintech Unicorns within a decade and African tech analyst announced with glee that Africa had finally entered the global venture conversation no longer as an as an afterthought, but as a frontier of opportunity.
As often happens with stories that are backed with generous pies that everyone hopes to have a slice of, they harden into orthodoxy. So today, African venture finds itself stuck in what can best be described as narrative lock-in — a condition where the same story continues to be told, not because it fully reflects reality, but because it is familiar, safe, and widely accepted.
But as Deng warns, the purpose-driven innovation narrative technology as a tool for social impact is becoming a game of musical chairs. For a while the game goes on and every “startup” who can assemble a decent pitch deck joins in it, but at some point the music will stop and many will be left stranded with no place to fit in. The apex predators of the ecosystem where the narrative thrives are obliged to keep it going because they know that they are faster and more muscular than the newbies and so when the music stops they know there is someone they can outmuscle.
For years, African startups were framed primarily as vehicles for financial inclusion, healthcare access, and development outcomes. While these goals remain important, the global investment environment has changed.
On July,1, 2025. The President of the United States, Donald Trump shut down the US Agency for International Development (USAID) . Elsewhere the UK has confirmed it will also cut its aid budgetaid by £6.1billion pounds this year. Across Europe, countries like France, Germany and Sweden are cutting down on their aid budgets. For those paying attention what is happening is obvious, the social mandate for investing in Africa is on its last legs. It is important that Africa starts planning for what Thomas Deng calls a potential “hollowing of African venture’s primary capital base, a collapse of strategy built on concessionary risk, and a forced realignment of the ecosystem.” To put that in layman terms. The music will stop sooner than later, a huge amount of chairs are about to disappear, and many startups are about to find themselves face planting in the dust
As Jasiel Martin-Odoom, Africa Investment Lead at Accion Ventures points out: The problem with purpose driven narrative and its emphasis on youth in particular is that youth alone does not create prosperity. Potential without productivity leads to frustration, not growth. The real challenge facing African economies is not the presence of young people, but the creation of systems that allow them to exercise meaningful economic agency in a world increasingly shaped by automation, artificial intelligence, and global competition. And “soft skills alone won’t do it. Africa’s future of work is blue collar jobs, manufacturing, construction, beauty and vocations.”
This is why African venture must now tell a new story — one suited to a new age where again as Abraham Augustine, Ecosystems and marketing Manager at Norrsken puts it: “Market systems that have long voted on ethereal impact are now weighing the cost of market-rate returns in a world of geopolitical disequilbrum.” Because as the popular African Proverb says: “A war that is announced in advance does not kill a lame man that is wise.” The first pillar of this new narrative is agency over potential. Africa must stop being framed primarily as a market of future promise and start being recognised as a source of present capability. This raise by Terra is the first step into what would lead to VCs taking a more than cursory glances at startups in hard tech areas like security, power and infrastructure, areas where Africa actually needs the most intervention rather than in e-commerce, Decentralized-Finance or fintech. The question should no longer be what Africa could become, but what African founders are already building — and how those products compete on global terms.
The second pillar is product over pity. Impact and profitability are not opposites, but neither should impact be used as a substitute for excellence. The most durable companies solve real problems with products people are willing to pay for, at scale. African venture must celebrate craftsmanship, intellectual property, and execution — not just intention. Again as Eliot Pence put it: “Frontier VCs should stop pricing frontier futures like it is a bad imitation of the West. Because the road itself contains high return businesses and that the future of Africa will look nothing like the present.”.
The third pillar is leverage over patience. The old story emphasised waiting: waiting for infrastructure, waiting for regulation, waiting for markets to mature. To again quote Pence
“Intelligent investing isn’t outcome anchored, it is stepwise. You don’t underwrite the jet engine, you underwrite the jet engine minus 10. You invest in in the primitives on the road to that end: Commodified hardware, autonomy software, training stacks, manufacturing loops. Those steps are often profitable long before the final picture looks like Boeing or Airbus.”
The new age rewards founders who use technology to leapfrog constraints rather than endure them. In other words the question should no longer be “When are we going to find an African company that can manufacture cars to fund. It should be What startups can we fund that would contribute the value that will allow other companies that will produce cars to rise?” Equally important is embracing complexity over simplicity. Africa is not a single market, and no single narrative can capture its diversity. The next chapter of African venture will be written across multiple sectors and geographies — from energy and climate technology to creative industries, enterprise software, and advanced manufacturing. A modern narrative must allow for plurality, contradiction, and experimentation.
That said, it is the the tech storytellers and brand narrative strategists to start to create narratives around the fact that Africa is no longer rising, Africa is now ready to take its place, build its own future and own its own future. It is time to amplify the stories of African founders who are applying first principles thinking to solving core African problems like manufacturing and infrastructure rather than just running to join the “low-hanging fruit” bandwagon.
The world is entering an era defined by AI-driven productivity, distributed workforces, and programmable capital. In this environment, countries and regions that control their narratives gain strategic advantage. Those that do not risk being defined by others. In the words of Marcelo Hugo Marmol, Argentine Investor and Head of Finance at BCapital Investment group “AI doesn’t reset ecosystems equally, it amplifies those willing to rethink first principles. African own its own agency and telling its AI-era stories isn’t optional anymore, it is strategic.”
African venture stands at an inflection point. The next story it tells will shape the type of capital it attracts, the ambition of its founders, and its role in the global innovation economy. The old narratives of population and purpose served their time. A new age demands a story rooted in agency, ambition, and global relevance.
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