Venture Capital as a Catalyst: Driving Africa’s Transformation Through Investment in Innovation

When Odunayo Eweniyi, Joshua Chibueze, and Somto Ifezue co-founded PiggyVest, their mission was clear: to give everyone the power to better manage & grow their finances. 

Simple. Or is it? 

What began as a digital piggy bank for the underserved would eventually evolve into one of Africa’s most impactful fintech platforms, enabling over four million users to build financial discipline and invest in their futures, with trillions of Naira in savings and investments. Backed early by Ventures Platform, PiggyVest didn’t just “solve a problem”; it unlocked an entire generation’s confidence in digital finance. This, like many others, exemplifies the transformative potential of venture capital (VC) in Africa, addressing systemic economic challenges and fostering market-shaping innovations.

Africa doesn’t just need capital. It needs catalytic capital. And that begins with stories like this.

Venture capital in Africa is not merely a pursuit of high multiples or unicorn valuations. It is a bold bet on people, systems, and futures that are too often overlooked. When deployed with discernment and purpose, VC becomes an engine for systemic transformation, creating markets where none existed, shifting behaviours, and rewriting what’s possible for millions. PiggyVest is just one seed, but its roots run deep, and its branches are still spreading.

In this article, we’ll explore how venture capital, when grounded in purpose and paired with local insight, can serve as the scaffolding for Africa’s transformation. We’ll discuss the power of market-creating innovation, examine the ripple effects of portfolio successes, and highlight why backing mission-driven founders isn’t charity, but sound, necessary action to change Africa. 

Africa’s Opportunity-Impact Paradox

In 2024, African startups raised over $3.2 billion across 547 venture deals - a 7% decline from the previous year. [2024 Africa Tech Venture Capital by Partech Africa]. Before we rejoice at the amount of VC funding we get, let’s compare it with the realities of the quality of life in Africa: approximately 96% of Sub-Saharan Africans earn less than US$300 monthly, and average government spending per capita remains low at just US$429. [Statista & World Bank]. Infrastructure deficits, stark inequality, and limited access to formal finance remain prevalent issues.

Traditional funding mechanisms - government budgets, commercial banks, and donor financing - often fall short in addressing these gaps due to risk aversion, regulatory hurdles, and limited scalability. In contrast, venture capital thrives in uncertainty. Its risk-tolerant nature makes it uniquely suited to back early-stage solutions that challenge the status quo and create new markets.

Crucially, venture capital extends beyond financial support. It goes steps further to provide mentorship, networks, and credibility (exemplified by Ventures Platform’s (VP) Platform and Networks team), all of which are essential for scaling transformative solutions. When directed toward mission-driven ventures, VC becomes more than a funding instrument; it serves as a catalyst for structural change and inclusive economic growth.

Market-Creating Innovation: The Hidden Engine

Market-creating innovation, as defined by Efosa Ojomo of the Christensen Institute, involves introducing products or services that transform complex, costly solutions into affordable and accessible offerings. These innovations don’t just enter existing markets; they create entirely new ones, enabling nonconsumers to participate in the economy for the first time. In Africa, where large portions of the population remain excluded from formal systems, this model is essential.

Consider Remedial Health, a VP-backed enterprise revolutionising pharmaceutical supply chains in Nigeria by leveraging technology to improve accessibility, transparency, and efficiency. Through its platform, Remedial Health digitises procurement processes and ensures last-mile delivery of medications, enabling thousands of community pharmacies and patent medicine vendors to access affordable, authentic medicines. By addressing fragmentation in the supply chain and reducing stockouts, the company is not only improving health outcomes but also supporting the sustainability of essential healthcare providers across the country.

Similarly, Moniepoint exemplifies how fintech innovation can drive large-scale transformation by improving financial access and enabling millions of SMEs to thrive. Through technology-driven infrastructure, Moniepoint strengthens transaction reliability, promotes economic inclusion, and continues to attract strategic investment while scaling impact at both national and international levels.

ThriveAgric also exemplifies this principle in action. By digitising the agricultural value chain, it provides smallholder farmers with access to financing, high-quality inputs, and guaranteed markets. To date, over a million farmers across Africa have been integrated into a structured, data-driven ecosystem that supports scale and sustainability.

The ripple effects are extensive. Local economies grow stronger as farmers earn more and spend more. Food security improves with better supply predictability. New jobs are created across agri-fintech, logistics, and rural operations. Moreover, formalising these previously informal transactions expands the tax base, driving revenue for governments through value-added taxes, income declarations, and improved compliance. As businesses scale, so too does their contribution to national GDP and public financing.

This is the power of market-creating innovation: it turns the underserved into producers and consumers, strengthens institutions, and generates long-term economic dividends. 

Innovations like this need the right kind of capital: the bold, catalytic kind - Venture Capital. 

What Then Do We Need?

For us to get to the point we need to be, we need more capital, more VC-backable businesses, more innovation-friendly policies, and visionary talents. This isn’t just a wish list; it’s a strategic imperative. The questions before us are not about whether innovation will happen, but about who will power it, who will benefit from it, and who will be remembered as catalysts in this era of transformation. The decisions made today by founders, investors, talents, policymakers, and the African diaspora will determine whether Africa’s burgeoning tech renaissance becomes a sustained economic reawakening…or another moment that ‘faded’ too soon.

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To Founders: Solve Real Problems, Sustainably. Build VC-Backable Businesses.

The continent does not need more copycats or short-term arbitrage plays. It needs builders who are obsessed with problem depth, user context, and longevity. Startups that endure are those that anchor their mission in systems-level thinking: designing for impact, defensibility, and scale. The goal is not just to raise capital, but to build something that can outlast hype cycles and outlive founders. Ask not just “What product can I launch?” but “What problem can I solve so well that a market forms around it?” and “How can I solve this problem using emerging technologies that position Africa not just as a beneficiary, but as a power-builder and power-user in the future of work?”

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To Investors: Fund Purpose, Not Just Potential

Capital in Africa must do more than chase metrics, it must understand terrain. That contextual intelligence is a critical differentiator in emerging markets. The time is now for Limited Partners, including diaspora high-net-worth individuals, local pension funds, and Development Finance Institutions, to back funds that are structurally and philosophically equipped to navigate complexity. Not only is the impact real, but the returns, as Paystack, ThriveAgric, and Piggyvest have shown, are increasingly undeniable.

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To Policymakers: Build the Rails

No train, no matter how well designed, can run well without good tracks. Well, they may try, but the crash is certain. African governments must see themselves not as gatekeepers, but as enablers of innovation. This means creating flexible regulatory sandboxes, simplifying business incorporation processes, enforcing intellectual property rights, and stabilising macroeconomic fundamentals like FX regimes. Fiscal, legal, and digital infrastructure is the foundation upon which innovation can flourish. Without it, the most brilliant startup will struggle to scale, if at all.

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To the Diaspora and Global Partners: Show Up, Strategically

Africa does not need saviours; it needs partners. The diaspora holds immense financial, intellectual, and social capital. Now is the moment to channel that into co-investments, mentorship networks, and boardroom advocacy. Global VCs, meanwhile, must resist the temptation to apply Western playbooks wholesale. Success in Africa requires proximity, patience, and partnership with local firms who understand the nuance. 

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To African Talents: Build for Us, With Us

You are not just part of Africa’s future; you are the engine. Your talent is currency in the global innovation economy. But beyond chasing the next global contract, we need builders who are anchored in the continent, committed to solving our problems with our context at the core. The continent needs you to lean into emerging technologies. not just as users, but as builders and creators. Build for scale, for relevance, and for impact. When you embed yourself in teams building for Africa, you accelerate your own growth while pushing the continent forward.

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To All of Us: This Will Take Time, and It Will Take All of Us

In her influential book, "Thinking in Systems," Donella Meadows advises, "If you have a sense of the rates of change of systems, you don’t expect things to happen faster than they can happen. You don’t give up too soon." Systems thinking provides a valuable lens for understanding how complex economic and social ecosystems evolve gradually, highlighting the necessity of patience, strategic planning, and adaptive leadership.

When applied to venture capital in Africa, this perspective is essential. Market-creating innovations on the continent require more than capital injections; they demand sustained effort, strategic persistence, and commitments that extend well beyond traditional investments, like portfolio support initiatives. Policymakers, investors, and entrepreneurs must work together to build resilient foundations, strengthen institutions, improve infrastructure, and shape enabling regulatory environments. Only then can Africa’s transformation be catalytic, enduring, and structurally sound.

We need to move from observation to participation, actively contributing to Africa’s startup ecosystem rather than watching from the sidelines. Join startups. Co-found them. Invest in them. Support them. Solve for the friction points you see every day. The future of work isn’t just happening to us, it’s being shaped by those bold enough to engage and build now. When we build for ourselves, we don’t just close the gap, we change the game. 🎤

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