How will Africa’s VC & private equity firms fare in 2025?

Africa's venture capital and private equity landscape are poised for growth in 2025, despite recent funding challenges. Senior Counsel at Dentons, Raj Kulsingam, and Vishal Agarwal, Chairman and CEO of Full Circle Africa, shared insights in a recent chat with CNBC Africa. They highlighted that companies showing profitability are seeing bright spots this year and noted a surge in merger and acquisition (M&A) activities. The interview shed light on the nuances and challenges faced by the industry, with a focus on venture capital, private equity, and infrastructure investments. While venture capital experienced a dip due to various factors such as the retreat of large funds and high valuations of previous investments, the private equity sector remained stable. The conversation also touched on the importance of cleaning up cap tables and supporting outliers in the market. Agarwal emphasized the need for sustainable business models and patient growth to weather market turbulence. Both experts highlighted opportunities across different regions in Africa, with East Africa showcasing significant activity in startups like Sun Culture and M-Copa, while West Africa, particularly Nigeria and Morocco, exhibited promising growth prospects. The outlook for 2025 includes expectations of larger raises for Series B and Series C candidates, emphasizing quality over quantity in funding decisions. The interview concluded with a message to African startups to stay agile and leverage innovative technologies to drive business transformation. Overall, the forecast for 2025 suggests a shift towards sustainable growth and consolidation in the African VC and private equity space.