Village Capital, a prominent global nonprofit in startup support, is betting on African expertise to transform the continent’s early-stage funding landscape.
This week, the organisation announced the launch of the Africa Ecosystem Catalysts Facility (AECF), a $4 million initiative designed to empower local entrepreneur support organisations (ESOs) across Ghana, Nigeria, and Tanzania.
Partnering with the Dutch Entrepreneurial Development Bank (FMO) and the Netherlands Enterprise Agency (RVO), the fund reflects a shift in thinking about how to nurture Africa’s rapidly growing but often uneven tech ecosystems.
“This isn’t just about sourcing deals; it’s about making smarter, more informed investments by working alongside those already building and strengthening their entrepreneurial communities,” said Nathaly Botero, Innovations Manager at Village Capital.
The fund has selected five African ESOs as venture partners: Reach for Change in Ghana; Nigeria’s Africa Fintech Foundry and Fate Foundation; and Anza Entrepreneurs and Ennovate Ventures in Tanzania.
Village Capital argues that working through local partners is critical for addressing Africa’s unique challenges, particularly economic mobility and climate resilience.
Local ESOs, they say, bring a nuanced understanding of cultural contexts and market needs that large foreign investors often lack.
Africa’s early-stage startups have faced significant hurdles accessing capital, especially outside major hubs like Lagos and Nairobi. Funding is often concentrated in a few sectors or urban centres, leaving many innovative ventures struggling to secure resources.
By giving ESOs “a seat at the table” as both co-evaluators and ecosystem builders, Village Capital hopes to de-risk investments and catalyse more targeted, context-aware funding.
The move builds on Village Capital’s long track record in emerging markets. Founded in 2009, the nonprofit has helped raise over $7 billion to support nearly 1,800 startups worldwide. In 2024 alone, it invested $850,000 in African agritech ventures Aquarech (Kenya) and Coamana (Nigeria), underlining its ongoing commitment to the continent.
Why It Matters
However, questions remain about the scale and potential impact of a $4 million fund across such diverse markets. While the local partnerships are seen as a progressive step, critics warn that small ticket sizes could limit the programme’s reach in a funding landscape that remains vast and underserved.
Despite the challenges, observers say the initiative signals a growing recognition that Africa’s digital future can’t be driven by foreign capital alone. Instead, local ecosystem players are increasingly viewed as crucial architects of sustainable growth.
With the AECF underway, the next test will be whether these local ESOs can translate community knowledge into scalable investments and whether more funders will follow Village Capital’s lead in handing power and funding to Africa’s homegrown innovators.
Talking Point
Finally, Funders Are Listening to Locals, But Why Did It Take This Long? For years, Africa’s innovation scene has been flooded with foreign capital and foreign assumptions.
Now, with Village Capital handing the reins to local ESOs, it feels like we’re waking up to something grassroots players have been shouting for decades: you can’t copy-paste Silicon Valley in Accra or Lagos. It’s not just refreshing; it’s overdue.
$4M is a start… But It’s Still Pocket Change. Let’s not romanticize this. The entire fund is $4 million, split across five organisations, in three countries.
That’s peanuts in the VC world. While the model is commendable, if global funders truly believed in local capacity, we’d see ten times that amount moving through African hands. This is a symbolic gesture; the real test is whether others will follow with deeper pockets.
Context-First Investing is the Only Way Africa Wins. The most exciting thing here isn’t the money—it’s the model. Empowering community-based organisations to shape investments is key to building effective solutions, particularly for climate resilience and inclusive growth. If we continue to rely on expat-run accelerators to guess at problems from abroad, we’ll never address the systemic issues that hinder startups.
