More Exits Don’t Equal Greater Liquidity in Africa’s Tech Ecosystem

While Africa’s tech sector is producing more exits than ever before, a new report from Stears and Ventures Platform reveals that this improvement masks deeper challenges. The continent saw 181 verified VC-backed exits between 2011 and 2026, yet liquidity hasn’t kept pace.

The disconnect stems from several factors: funding declined by 33% over the period while exits rose by 36%, international buyers represent a shrinking share (down to 33% from 56% in 2020), and acquisitions dominate exit routes (73%). This creates a backlog of companies that raised substantial capital but can’t find buyers in a constrained market.

“The problem isn’t too few exits—it’s that exit routes are narrow, buyer pools are shallow, and the broadening we should expect with maturity hasn’t happened,” noted Dr. Dotun Olowoporoku of Ventures Platform.

Concentration Across Key Metrics

  • Geographic: Nigeria, South Africa, Egypt, and Kenya account for 81% of exits
  • Sectoral: Financial services generate 30% of all exits—more than the next two sectors combined
  • Buyer mix: Acquisitions comprise 73% of exits, dwarfing other routes

The Recycling Mirage

The capital recycling ratio (exits divided by investments) improved from 0.032 in 2022 to 0.065 in 2025—but this is largely mathematical. With funding volumes shrinking, the ratio improves simply because the denominator decreases.

A New Measure of Liquidity

The report introduces the Stears-Ventures Platform Liquidity Index, which assesses both liquidity volume (80%) and quality (20%). The quality component considers international buyer participation, new capital intensity, and route diversity.

West Africa leads with 86 exits, a Liquidity Quality Index of 87.03, and a Diversity Score of 85.80—topping all regions on both metrics. North Africa scores well on quality thanks to European and Arab buyer interest, while Southern Africa lags in diversity despite having a deep corporate base.

A Glimmer of Hope: Intra-Ecosystem Acquisitions

The most encouraging trend is venture-backed companies acquiring others—like Flutterwave’s acquisition of Mono Technologies, Risevest’s purchases of Chaka and Hisa, and OmniRetail’s acquisition of Traction Apps. These deals demonstrate that the ecosystem itself is beginning to generate buyers, particularly in fintech.

When acquisitions come from within, they reduce reliance on external capital cycles and create a compounding effect—companies grow faster, become more attractive targets, and set valuation benchmarks for others.