You can’t leapfrog without the base to leapfrog from. You can’t have asset-light models if the assets don’t already exist. And you can’t build a digital economy without physical infrastructure underneath.
You can't 'leapfrog' without the base to leapfrog from
You can't have asset-light models if the assets don't already exist
You can't build a digital economy without physical infrastructure underneath
— Emeka Ajene ✍🏽 (@eajene) January 21, 2025
These realities — obvious in hindsight — have taken Africa’s venture capital ecosystem years (and a ton of capital) to internalize.
At the 2025 Africa Prosperity Summit in Lagos, Nigeria, Haïle Amegashie, Associate Investor at Paris-based VC firm Breega, shared his perspective on what’s changing in African VC as the market matures.
Breega announced the ~$50 million first close of Breega Africa Seed I in June 2024, a fund that invests in seed to Series A tech companies across Africa.
Three insights from Amegashie’s exclusive conversation with Zusi Inegbeniki for Afridigest stood out:
1. VCs in Africa are increasingly infrastructure-averse
“The number one thing people have understood in the past three years is you cannot invest in businesses if the underlying infrastructure is non-existent,” says Amegashie.
“That’s not the role [of] VCs whatsoever. There are other types of capital layers that can be used for that, and we’re starting to have [those] conversations amongst ourselves.”
The first wave of VC in Africa saw many venture-backed businesses struggle not because of poor execution or weak product-market fit, but because basic infrastructure — logistics, payments rails, reliable grid power — simply didn’t exist.
Many investors found themselves effectively funding infrastructure development as a prerequisite to their portfolio companies’ core businesses, burning through significant capital in the process.
Amegashie suggests that VCs in Africa, having been burned here in the past, are keen to avoid this in the future.
But other investors maintain that infrastructure-heavy tech investments can command higher margins and generate outsized returns once the infrastructural layers are established.
Ultimately, the ongoing VC-infrastructure conversation signals a maturing ecosystem where venture capital’s role is increasingly rigid. While this is likely to be a boon to VC returns, other types of capital may unfortunately remain scarce.
2. It’s perhaps time to stop chasing unicorns
“Having 10 companies that sell for $200 million when you invested at pre-seed or seed is still a good return,” Amegashie emphasizes.
“We have to stop wanting billion-dollar companies. Paper valuations are great, but are you actually getting the money?”
The observation cuts against years of unicorn obsession in African tech.
Between 2021 and 2023, the continent saw a surge in paper valuations that rarely translated into actual returns, but led to an undue emphasis on valuation over value creation, founders losing control of their cap tables before reaching profitability, and other negative outcomes.
Amegashie points to Paystack as a model to emulate: the company that built real value, solved a genuine problem, and delivered tangible returns when it sold to Stripe for a reported $200 million in 2020.
“We need to focus on backing founders building solutions that are must-haves rather than nice-to-haves,” he says. “Building sustainably means you’re still incentivized to continue when times get hard.”
His practical advice for founders: know how to manage cash, raise at the right moment in the right way, and have early conversations with Series A and B investors about the metrics they need to see. Stop playing the valuation game.
3. Nigeria is now — and next
“We’re seeing more and more Francophone Africans saying, ‘The ecosystem is mature in Nigeria. We have opportunities in our country, but let’s go to Nigeria to learn the ropes,'” Amegashie observes.
According to recent reports, the Nigerian startup ecosystem is now valued at over $12 billion — the largest in Africa by a significant margin. And Lagos was recognized as the world’s fastest-growing emerging tech ecosystem earlier this year.
But the country offers more than scale and growth. Nigeria is becoming a capability builder for the continent.
“The environment pushes you to be resilient. Only resilient people can be here,” Amegashie argues. “It’s also a very cosmopolitan ecosystem — you have Americans, Europeans, Africans from across the continent.”
For founders from other African markets, Nigeria offers something their home markets often don’t: a mature ecosystem with proven playbooks, accessible capital, experienced operators, and the intensity required to stress-test business models.
The pattern mirrors, at least superficially, how founders from across Europe and the Middle East once flocked to Silicon Valley not just for capital, but for know-how.
The common thread
Broadly speaking, what ties Amegashie’s three observations together is ecosystem maturation.
Venture capital in Africa is moving past the hype cycle into something more disciplined and, potentially, more durable.
“Founders are more wary and investors are more educated about the market,” Amegashie notes.
“We’ve burned too much capital playing the hype game. That hasn’t helped founders in the ecosystem.”
The lessons are being learned.
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