Andile Masuku

A recent Afridigest LinkedIn post citing Anil Atmaramani's championing of venture capital (VC) firm Antler's refreshed approach to venture investing in Africa raises important questions. Atmaramani is a partner at the organisation, and his call to "rethink the mould" by backing everything from tech-enabled innovations to working capital loans and day-zero founders sounds admirable, but blurs distinctions that may ultimately hurt the clarity of discourse around funding in African markets.

Definition disconnect

The hard truth? Venture capital, by its classic global definition - accounting for hyper-growth, hyper-scale and super-fast outsized returns - simply does not exist as a genuine asset class in Africa. When we layer on calls for VC to be a democratised, inclusive investment mechanism that everyone "deserves" access to (which I genuinely wish it would be), it becomes an even more problematic misnomer, noble intentions notwithstanding.

We need to differentiate funds using the VC label primarily to land limited partner (LP) investments that would not otherwise flow to them from authentic VC activity. While many African VC proponents would attribute the low allocation of global VC funding to Africa (no more than 2% by even the most generous estimates) to systemic challenges and faulty investor perceptions, the unvarnished reality indicates that most international venture capitalists simply don't even consider the continent, arguably because the asset class as strictly defined doesn't truly operate here.

Label vs reality

The problem isn't Atmaramani's intentions or Antler's broader investment strategy. Rather, it's the insistence on calling what they're doing "venture capital" when it deviates so substantially from what VC represents globally. This ambiguity perpetuates unrealistic expectations that ripple through the ecosystem - from LPs to fund managers to founders.

An early-stage tech founder I spoke to (who'd rather not be named) astutely noted in a recent exchange, "'VC' elsewhere is just a synonym for venture funds, but they call it VC because that's the language that resonates with LPs. By using that terminology, they're held to [brutal] VC expectations, which ripples down all the way to founders."

Unicorn oversimplifications

The ongoing Tyme Bank startup success story is instructive here. Though now celebrated as a unicorn, its journey from a Deloitte Consulting project funded by MTN, to being acquired by Commonwealth Bank of Australia for A$40 million (R500m) after failing to secure local VC backing, then later being bought by Patrice Motsepe's African Rainbow Capital, wasn't driven by traditional venture capital dynamics. The company's foreign backers saw value that local capital markets missed - and this pattern repeats across successful African ventures.

Tech writer at Money, Myths & Digital Africa and Norrsken ecosystem and marketing manager, Abraham Augustine's recent insight that "venture capital is not a fit for almost anywhere outside of the United States of America and maybe Israel" rings painfully true when examining African contexts. Perhaps more telling is his observation that "people are mostly frustrated that venture capital is (1) not free money (2) not giving money to things they think VC should fund."

This fundamental disconnect drives much of the disappointment in Africa's funding landscape. What we're actually witnessing with Antler's approach isn't a reinvention of venture capital, but rather an acknowledgment of its limitations in African markets and a pivot toward more contextually appropriate investment models.

Honest alternatives

Balloon Ventures' 12-year approach to establishing an entirely new asset class around backing "boring African SMEs" - with demonstrable commercial and impact viability - represents a more intellectually honest path. Similarly, Chronos Capital, which has backed successful South African ventures like Tyme, Rain (who claim to be South Africa's largest 5G network) and OfferZen (a well-regarded South African tech talent marketplace) simply calls what they do "capital," side-stepping VC pretensions altogether.

When we examine Africa's most remarkable tech successes (and setbacks) - from Wave (mobile money service provider in Francophone West Africa) to Glovo (Spanish on-demand delivery platform operating in East, West and North African markets) to Moniepoint (Nigerian fintech company) - their trajectories look starkly different from what classic VC literature would suggest. Many were bootstrapped initially, with institutional capital coming in much later in their journeys. Others like Jumia leveraged connections to international capital that simply aren't available to most local founders.

Beyond templates

The most constructive approach isn't necessarily redefining venture capital to encompass everything from day-zero startups to working capital loans. Rather, it's developing differentiated funding mechanisms explicitly designed for African market realities—mechanisms that don't apologise for their divergence from Silicon Valley templates.

For African founders and ecosystem builders, the most entrepreneurial energy needs to be directed toward 'getting started' without fixating on funding models ill-suited to local contexts. This requires genuine invention and innovation rather than semantic flexibility around established investment categories.

Fresh air needed

Imagine the freedom founders would enjoy without the exhausting task of contorting their visions to fit inappropriate investment templates. And for fund managers - envision operating without the pressure to reshape your investment thesis to satisfy the latest sustainable impact buzzwords demanded by international LPs. That clarity - calling things what they truly are rather than what sounds attractive on a pitch deck - would be like breathing fresh, clean air, far above the noise that distorts our ecosystem's growth priorities.

The future of African tech financing doesn't lie in broadening definitions to the point of meaninglessness, but in precise language that acknowledges the continent's distinctive capital requirements and business realities.

That clarity might well be worth more than another misapplied Western venture development standard and well-meaning (but ultimately confusing) narrative of progress that doesn't adequately match on-the-ground conditions.

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