54 Collective will cease its venture studio operations in Africa following the conclusion of its partnership with the Mastercard Foundation on April 30 2025.
In an internal meeting on February 20 2025, 54 Collective’s leadership informed staff that the closure would lead to layoffs as the firm will disband its entire venture studio team. This includes employees responsible for supporting portfolio companies in areas such as product development, technology, marketing and growth, human resources, and business development.
The Mastercard Foundation’s funding has been essential to 54 Collective’s operations, supporting its venture studio, Gen F accelerator, and Entrepreneur Academy. However, as the two organizations take different strategic directions, 54 Collective – officially registered as Africa Founders Ventures (AFV) – has been unable to secure alternative funding to sustain the studio.
MasterCard Foundation Launches $200 Million Fund to Invest in Early Stage African SMEs
The fund seeks to address 2 key entrepreneurial African problems:
* Under capitalization of African-led investment funds
* The lack of financing for African SMEshttps://t.co/CzmsaMqpPs— BitKE (@BitcoinKE) January 3, 2023
Since the partnership began, 54 Collective has supported over 40 startups and contributed to the creation of more than 17,500 direct and indirect jobs. Additionally, it has awarded 600 grants to SMEs through the Entrepreneur Academy.
“Startups currently in the program will continue receiving technical support from the 54 Collective Venture Studio until April 30, 2025,” Daniel Hailu, Executive Director of Pan-African programs at the Mastercard Foundation, said in a statement
The closure will not impact 54 Collective’s $40 million venture capital fund, UAF1, which will continue investing in startups across Africa. Additionally, the firm retains a separate multi-million-dollar fund raised in 2023 to support portfolio companies and promote gender inclusivity in the VC ecosystem.
A venture studio is an organization that builds startups from the ground up rather than just investing in them. Unlike traditional venture capital firms that primarily provide funding, venture studios take a more hands-on approach by:
- Developing business ideas internally or in partnership with entrepreneurs
- Providing resources such as product development, marketing, tech, and HR support
- Actively managing startups in their early stages until they can operate independently
The decision is still a setback for 54 Collective which, as reported by BitKE, rebranded in August 2024 with ambitious plans to support 105 startups over five years.
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Founders Factory has an active portfolio of over 50 ventures across 10 countries. To date, the firm has supported more than 70 ventures and helped its portfolio… pic.twitter.com/MacL65hA35
— BitKE (@BitcoinKE) August 9, 2024
In Kenya, the following startups will be affected:
• Wingi — custom brand packaging solutions
• Zanifu — SME-focused buy-now-pay-later platform
• Zuri Health — digital healthcare platform
• Wazi — digital mental health platform
• Wareflow — invoicing platform
• Vuna Pay — agricultural finances support
• Shamba Pride — agricultural e-commerce platform
• Synnefa — smart farming solutions
• Powered By People — B2B ethical sourcing marketplace
• Quikk Dev — digital finance-link service
Founded in 2018, 54 Collective is based in South Africa and has invested in over 70 startups. The firm integrates venture studio and venture capital models, offering both investment and mentorship to early-stage founders across Africa. It collaborates with major corporate organizations and impact investment firms, with partners including South Africa’s Standard Bank, healthcare company, NetCare, and the Dublin-based Small Foundation.
In August 2023, 54 Collective secured its largest funding commitment when the Mastercard Foundation and Johnson & Johnson Impact Ventures pledged $114 million to expand its ‘unconventional VC model’ and better support African founders. Under the agreement, the Mastercard Foundation committed to providing $20 million annually over five years.
54 Collective maintains that it will continue investing as usual, though it is expected to reduce the size of its core investment team in Kenya, Nigeria, and South Africa.
The move by MasterCard reflects a much larger trend across Africa where VCs have reduced their exposure across the continent over the last couple of years.
According to a new report by Africa: the Big Deal, startups in Africa raised $2.2 billion in 2024 in equity, debt, and grants, a -25% drop compared to the $2.9 billion that was raised on the continent in 2023.
FUNDING | African Startups Raised $2.2 Billion in Venture Funding in 2024 – a 29% Drop from 2023
A closer look reveals that 2024’s relative underperformance was largely due to a sluggish start to the year, with just under $800 million raised in H1 2024https://t.co/06M2VPVBCo pic.twitter.com/iwHg3ddEVb
— BitKE (@BitcoinKE) January 9, 2025
Y Combinator, another key accelerator for African startup ecosystem, has also significantly scaled back its invetments in Africa in recent times.
The Y Combinator’s S22 (Summer of 2022) batch featured merely eight African startups, marking a 63% decrease from the preceding cohort (W22) which had a record 24 African startups. In the most recent W23 (Winter 2023) cohort, only three startups from Africa were included, representing the lowest number in recent years.
🌍FUNDING | As Y Combinator Retreats, Baobab Network Declares Ambition to Invest in 1,000 African Startups by 2033
The move by Baobab is particularly significant given the scaling back of Y Combinator, another key accelerator for African startup ecosystem, in recent times. In… pic.twitter.com/POTVBSomBg
— BitKE (@BitcoinKE) October 21, 2023
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