Revenue-Based Financing for African Startups

Raising capital in Africa isn’t easy. Banks ask for high collateral, and VC funding is slowing down.

Yes, African startups raised $3.2 billion in 2024, but most of that went to fintech giants in Kenya, Nigeria, South Africa, and Egypt. For other sectors and markets, it's tough.

More founders are struggling to attract investors or hesitant to give away large chunks of company, and now the focus is on learning to run a startup with recurring revenue, whether from subscriptions, transactions, recurring contracts, digital services, etc.

VC is not always the best fit for African startups, and many successful businesses have grown without it.

One way out is Revenue-Based Financing (RBF), a flexible, non-dilutive funding option that allows you to borrow against future revenue instead of giving away ownership.

For example, with a non-dilutive capital of $250,000 & repayment cap of $375,000, once this amount is repaid, the obligation ends, and there are no extra payments if revenue spikes.

Instead of fixed repayments like traditional loans, it is easier to manage cash flow and secure capital without waiting for a big funding round.

No giving up equity or dealing with rigid loan repayments. Funding based on future revenue also means being able to stay in control of the company while accessing growth capital & scaling without the dilution or restrictions of traditional funding.

💡 Quick Facts:

• The RBF market is booming: $4.2 billion in 2024 to a projected $14.5 billion by 2034.

• Africa is a prime market for this model, with startups in fintech, SaaS, e-commerce, and digital services leading the charge.

• More investors are entering the RBF space, making it easier for African founders to access flexible capital.

The signal here for African founders, especially those outside the traditional VC spotlight, is that RBF is opening new doors to funding that works in our markets.

Instead of chasing venture capital, maybe it’s time to ask: “How can I fund my business on my terms without giving up control?”

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