Africa’s Growing Exit Market Faces a Liquidity Gap

While exits from African tech ventures have increased, providing returns for investors, a new report highlights a concerning trend: liquidity isn’t keeping pace. The Stears and Ventures Platform analysis of 181 VC-backed exits between 2011 and 2026 shows that more companies are exiting, but at the same time, funding has declined.

Key Findings:

• Exit volume up 36%, but funding down 33% over the period
• International buyers decreased from 56% in 2020 to 33% in 2025
• Acquisitions dominate (73%) compared to other exit routes
• Four countries concentrate exits: Nigeria, South Africa, Egypt, and Kenya account for 81%
• Financial services lead with 30% of all exits

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

The capital recycling ratio (exits divided by investments) has improved, but mostly because funding decreased rather than exits genuinely scaling. This creates a backlog of companies needing liquidity in a market that can’t fully provide it.

New Liquidity Index Tracks Quality & Diversity

The report introduces the Stears-Ventures Platform Liquidity Index, which measures both volume and quality (international buyer participation, fresh liquidity, route diversity).

West Africa leads with 86 exits and high scores on both dimensions, driven by intra-regional activity. North Africa benefits from strong European and Arab buyer interest, while Southern Africa lags in diversification despite a developed corporate sector.

Signs of Ecosystem Maturation

The most encouraging trend is venture-backed companies acquiring their peers - like Flutterwave’s acquisition of Mono, Risevest acquiring Chaka and Hisa, and OmniRetail buying Traction Apps. This shows that the ecosystem is beginning to generate internal buyers, reducing reliance on external capital.

These acquisitions are particularly visible in financial services and demonstrate how companies can scale faster through strategic acquisitions, creating more attractive targets along the way.