Why do so many high-potential ventures fail in Africa? Teams are competent. Pitch decks are polished. Market research is solid. Due diligence confirms demand. Founders graduate from the world’s best business schools and accelerators. Yet Africa’s complex institutional environment distorts even the best-laid strategies. These case studies illustrate this phenomenon.
DIGITAL INFRASTRUCTURE READINESS AND EDUKOYA
Founded in 2021, Edukoya’s mission was to offer world-class digital learning solutions. In furtherance of this mission, it raised 3.5million USD in seed funding. However, institutional realities hampered scale – low digital readiness, limited household spending power, policy fragmentation and deep entrenchment of offline tutoring. The lesson: understand the institutional terrain.
Read also: The problem is not always what it seems – it’s often what lies beneath
USER TRUST AND GOMYWAY
GoMyWay was a ridesharing platform founded in 2015 to enable safe, convenient and affordable carpooling. Backed by Konga CEO Sim Shagaya, it shut down after struggling to adapt to user trust dynamics and monetization hurdles. The lesson: Technology might work but trust is imperative for adoption.
Read also: Don’t rush to solve – pause to define
INFORMAL COMPETITION AND OLX NIGERIA
Founded in 2006 to provide a platform for the sale and purchase of goods and services online, OLX soon became a household name. However, in 2019, it exited Nigeria and Kenya, derailed by informal competition and shifting user behavior. The lesson: Underestimate institutional frictions at your peril.
Read also: Build it to last – or prepare to explain
These firms had clear advantages – brand recognition, strong teams and global capital. But they failed to adapt to the complex local realities that shape value creation in Africa. To succeed in Africa, it’s important to not merely follow Silicon Valley prescriptions but to account for the myriad of factors that determine success and failure in its complex institutional environments.
