OPINION | How Fintech Founders in Africa Are Thinking About Fundraising and Building in 2025 and Beyond

A growing number of founders understand that while capital helps you move faster in African markets, it can't solve for missing infrastructure or market fragmentation. So many are opting for profitability and making better bets.

CryptoGuru··5 min read

A post by Bernard Parah, Founder and CEO, Bitnob.

 

I’ve been having interesting conversations with African fintech founders lately, and there’s a clear shift in how they’re thinking about building and fundraising. So I wanted to share some reflections from those conversations.

A new confidence is emerging, backed by two powerful enablers:

  • The crypto advantage (Bitcoin, stablecoins)
  • AI-driven operational efficiency

 

Both of these unlock speed and global reach by default. This is changing how founders approach fundraising conversations.

 

The Real Cost of Building in Africa

The Traditional Path ( I am guesstimating here)

  1. Pre-funding local bank accounts in each market ($100K-500K minimum per market)
  2. Complex FX operations: 2-10% loss on each currency conversion, plus transfer fees
  3. Heavy operational overhead:
    • Reconciliation teams
    • Compliance teams per market
    • Treasury teams in each market
  4. Multiple third-party supporting services that work better in each of those markets
  5. Capital lockup:
    • T+2 or more settlement cycles
    • Regulatory deposits per market
    • 20-30% of float locked in various banking partners

 

The New Playbook

  1. Strategic local partnerships:
    • 2-3 key partners per market instead of direct presence
    • Shared regulatory compliance burden
    • 50-70% reduction in capital requirements
  2. Stablecoin/crypto infrastructure:
    • Settlement times reduced to —- guess? INSTANT
    • FX costs down to 0.5-1%
    • Single pool of liquidity serving multiple markets
  3. Automated operations:
    • AI handling treasury movements across blockchains
    • 5-7 people managing what previously needed 20-30
    • Real-time reconciliation instead of end-of-day
  4. Compliance and risk:
    • On-chain transaction monitoring cutting fraud rates by 40%
  5. Capital efficiency:
    • Float utilization up by 40-50%
    • Treasury yields from stablecoin lending
    • Natural hedge against local currency volatility
  6. Most importantly – companies earn revenues in stablecoins or bitcoin which takes away their local currency devaluation risks

The IACT (Internet-AI-Crypto Trinity)

This new toolkit raises an important question:

Why raise $10M when $3M-$5M might be enough to build something transformational over the next decade?

 

A growing number of founders understand that while capital helps you move faster in African markets, it can’t solve for missing infrastructure or market fragmentation. So many are opting for profitability and making better bets.


It’s a marathon, not a sprint. The key is knowing when to accelerate.

Take the recent developments between Rwanda and Ghana – they’re working to create a fintech licensing passport. When infrastructure like this exists, that’s the time to sprint. Without it, extra capital often means extra burn.


The IPO Reality Check?

Let’s be candid about IPO aspirations – historically, U.S. markets haven’t been the most welcoming to African companies post-listing. The “Africa tax” on valuations is real, and it affects everything from fundraising to exit opportunities.


Is There an Evolving Investor-Founder Dynamics in Play?

This sentiment makes things interesting for investors. The best founders are looking beyond capital – they want to understand what unique insights or networks you bring to the table. When both sides focus on building genuine partnerships rather than just financial relationships, everyone wins. I think this is where likeability will be an advantage to some investors.

If you’re the “just go work and give me returns” firm, you’re in for a wild ride.

 

The Future of Payments in Africa

I’m seeing the emergence of a new kind of payment company in Africa – lean, profitable, and efficient. Many strong teams are choosing to raise modest pre-seed/seed rounds or bootstrap entirely.

Larger African payment companies have an opportunity here, but they need to move thoughtfully. They might need to follow Stripe’s playbook – acquiring smaller, innovative teams building on these new rails.


No, that internal crypto team you set up is likely going to fail, it’s not in your DNA! Find those nerds grinding it out, give them the resources they need and let them figure out how to build something that integrates into your infrastructure. Why do I think that strategy is going to fail – that’s because you need outsiders, people who are not burdened by what you already know to bring in new imaginations.

If they don’t, global payment companies will step in and do that, when they do, it tends to work out better for everyone – investors, founders, and acquirers alike.

 

A Note to Investors Looking at African Markets

The value proposition for investors needs to evolve. Beyond capital, relationships matter – founders tend to work with people they trust and respect. Initial conversations work best when they involve partners or ex-founders who understand the journey firsthand. Also, it might be in your best interest to work with firms who already invest in and understand the market instead of going direct.


Yes, progress is gradual. The path ahead isn’t always clear. But I’m seeing the best minds in the industry building with purpose and vision. I strongly believe the next 5 years are going to be transformational and I’m happy for everyone building right now (even in your suffering, be cheerful :))

Here’s to building meaningful companies and partnerships.

It will be so rude of me to finish a write up without asking you if you already own some bitcoin. Do you?

 

This post was originally published on SubStack.

 

 

 

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