A new report from Stears and Ventures Platform—tracking 181 venture-backed exits between 2011 and 2026—reveals a paradoxical reality: while exit volumes are hitting record highs, the African tech ecosystem is actually becoming more constrained.
The data suggests that the recent “improvement” in liquidity is less about a booming market and more about a mathematical byproduct of a funding drought.
On the surface, things look promising. The capital recycling ratio (exits divided by investments) doubled from 0.032 in 2022 to 0.065 in 2025. However, this isn’t a sign of a robust market. It is largely driven by a 33% decline in funding alongside a 36% rise in exits. Essentially, the ratio improved because the amount of money entering the system shrank, not because the exit market fundamentally matured.
The report highlights a “backlog” of companies that raised massive rounds during the 2019–2022 boom but now lack viable exit routes. Several factors are tightening the squeeze:
• Concentration: 81% of exits are crammed into the “Big Four” (Nigeria, South Africa, Egypt, and Kenya), with Financial Services accounting for 30% of all activity.
• Acquisition Dominance: M&A accounts for 73% of all exits, far outstripping IPOs or secondary sales.
• Waning International Interest: In 2020, foreign buyers accounted for 56% of exits; by 2025, that number plummeted to 33%.
“The problem is not too few exits,” says Dr. Dotun Olowoporoku of Ventures Platform. “It is that exit routes are narrow, buyer pools are shallow, and the broadening that should accompany maturity is not happening fast enough.”
The most promising trend identified isn’t coming from global giants, but from within the continent. Venture-backed companies are starting to buy one another.
Recent examples include:
• Flutterwave acquiring Mono Technologies.
• Risevest snapping up Chaka (Nigeria) and Hisa (Kenya).
• OmniRetail acquiring Traction Apps.
This “internal recycling” is the closest the ecosystem has to structural improvement. When local companies become acquirers, it reduces dependence on volatile global capital cycles, helps establish valuation benchmarks, and creates a self-sustaining loop of growth.
For African VC to truly mature, liquidity can no longer be treated as a “hopeful byproduct” of time. Fund managers must bake liquidity planning into their initial investment strategies. Without a wider pool of buyers and more diverse exit paths, the current surge in exits remains a mirage rather than a milestone.
