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8 Reasons 2023 will be a Great Vintage Year for East African Fintech (and 4 Reasons it Won't Be)



Many of you have heard me talk about my admiration for the East African tech ecosystem. For Nairobi in particular, there aren’t many places in the world where there is such a unique intersection of high-caliber entrepreneurial talent AND big problems to solve impacting 1 billion people. Over the next 5–10 years, I believe we will see global fintech companies that are born in Nairobi. 2023 will end up being a great vintage year.

  1. Valuations are down, while value is up. It’s a hard time to raise capital, but ironically, a great time to deploy capital.

  2. Speculators are out. More local capital is in. Local angels and local funds that combine global experience and local nuance are becoming more active.

  3. Companies with strong balance sheets and fundamentally solid business models will soar into the next season. These companies will quietly grow 2–5x in 2023 while others flounder or wind up. You won’t hear about them until 2024, or possibly later. Unit economics is strong, and some of them are already profitable.

  4. No major elections this year in East Africa (Rwanda 2024, Ethiopia 2024, Tanzania 2025, Uganda 2026, Kenya 2027). Of course, there will be other exogenous events (look at Sudan right now).

  5. It’s getting easier to start fintechs, as there are now more fintechs serving fintechs. There are more plays around interoperability and banking as a service, while progress is made (albeit unevenly) with regulatory frameworks, mobile money, and other fintech-accelerants. People are building solutions, and now people are building for the people who are building solutions also.

  6. For better or worse, some companies that raised in 2019–2021 are going to struggle raising the next round, or be forced to down-size and or raise a down-round. There will be newly available assets and talent coming back to the market.

  7. Despite the recent headlines, web 3, blockchain, and crypto are still growing and arguably have some of the best use cases in Africa. There is a flattening of the world’s economies, and these innovations will begin to take hold in Africa. Note that Nigeria, Morocco, and Kenya are among the countries with highest crypto adoption.

  8. The African growth story hasn’t changed. Despite many exogenous shocks, long term growth will continue for decades to come — and this is after decades of consistent GDP growth over the last 30 years. Check out Kenya’s GDP over the last 50 years.

Kenya GDP (in constant 2015 USD) from 1971–2021


The time is now!


Of course, this list also has to be countered with a few reasons 2023 will be difficult for East African Fintechs, right? We need to be both-eyes-wide-open optimists.

  1. The macro-environment is now characterized by high inflation, high interest rates, and political instability. This could mean that the era of cheap capital is gone — and some say, maybe gone for good. Investors looking at alternative assets (like early-stage venture capital) will be more risk-adverse this year than any of the last 10–15 years. The amount of capital available for early-stage will shrink considerably. This makes it harder for ventures, and only the best will be funded. And out of those, only the best will grow efficiently enough to make it to the next stage.

  2. I’m still seeing some entrepreneurs come out with pitches that include outlandish valuations. That’s okay — this will work itself out via the power of the market. But, I think some decent ventures with a chance to scale will price themselves out of continuing forward.

  3. Some of the newly available great talent will finally hang it up and opt for stable corporate jobs with decent salaries, instead of jumping back into another entrepreneurial venture. Can’t blame them — as heretical as this sounds, I think the whole “entrepreneur” persona has been overhyped in the ecosystem for some time. It’s not for everyone, and it’s definitely not a fit for every season of a person’s life.

  4. A lot of companies that raised rounds with high valuations in 2019–2021 will run out of cash. Down rounds, consolidations, asset sales, lay-offs, and wind-ups ahead. This also isn’t necessarily a bad thing in reality — the market always self-corrects over time. And this clears the way for the next wave of innovators. However, the optics of all these “negative” events could counter the “Africa is rising” and venture capital narratives, leading to a negative down loop in funding.

What are you seeing?


Our overall conviction is still that the 8 pros outweigh the 4 cons. I’d say the cons have more to do with funding than fundamentals. And as such, our plan is to invest in about 30 fintech and fintech-adjacent start-ups in the next 30 months.

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