Capital Efficiency: Today's Metrics vs Future Potential 🚀

With funding taking a dip across the African ecosystem in 2024, something that’s become supercritical for African founders this year is capital efficiency.

It's no longer an optional route.

How we spend every dollar we receive in 2025 can make or break our companies.

Since 2024, investors have stopped chasing valuations and buzz. They’re zooming in on startups that can scale sustainably and stretch every dollar like it’s their last.

In a lean funding market, a path to profitability instantly makes you attractive to VCs. We now know that VCs have had enough of the threading, so more founders need to take action with a business owner's mindset.

On the average, here’s what founders should be tracking in 2025 and why it matters:

• Burn Rate & Runway: What are your essentials? What needs to be cut off?

• Lifetime Value (LTV) & Customer Acquisition Cost (CAC): Your LTV/CAC ratio needs to be at a sweet spot.

• Revenue Growth: Your spending should pay off in terms of your revenue.

• Gross Margin: With a high margin, there's more cash to reinvest and grow sustainably.

Investors are paying attention to these metrics, and so should you.

To secure the best terms for actual profitability means to show up with strong fundamentals and a healthy growth trajectory.

We modelled a hypothetical scenario of a startup before and after capital efficiency and our chart shows what’s possible, a 4-month runway extended to 12, a CAC-to-LTV ratio hitting the sweet 5:1 spot, and revenue growth going from -5% to +15%.

It's your turn!

What steps are you taking to reshape your numbers and make 2025 your most efficient year yet?