From venture capital to private equity: What the new global exit trend means for African tech

As global venture capital recalibrates and exits become harder to secure, a powerful trend is reshaping how technology scale-ups find growth partners: the rise of private equity as a dominant buyer of technology companies. While this shift has been accelerating in Europe and the United States, its implications for Africa are profound and potentially transformative.

A recent report by Clipperton, The Journey from Venture Capital to Private Equity: The 2025 Guide for Tech Startups, shows that the share of venture-backed firms sold to private equity funds has tripled since 2010, rising from 8% to 24%. Software deals above €50 million are now overwhelmingly led by private equity, accounting for more than 80% of such transactions. As global private equity firms deploy record levels of uninvested capital, Africa’s technology ecosystem stands at the edge of a new exit frontier.

Why the VC-to-PE Shift Matters for Africa

African startups have long faced structural challenges in securing exits. IPO markets remain shallow, strategic buyers are limited, and acquisitions from foreign corporates often depend on navigating complex regulations and local market unfamiliarity.

Private equity can fill this gap in several ways. It provides a scalable exit pathway beyond IPOs at a time when global listing windows remain uncertain, offering African growth companies a credible route to deliver liquidity to early investors. This is particularly relevant for fintech, SaaS, logistics, agritech and digital infrastructure businesses.

Private equity also supplies capital for expansion and consolidation. Many African markets remain fragmented, and the buy-and-build strategies favoured by private equity offer a model for regional integration across East, West and Southern Africa.

Finally, private equity investors bring the operational discipline and governance processes that African scale-ups increasingly require. They focus on formalised governance, refined unit economics, CFO-level financial reporting and disciplined approaches to KPIs and profitability.

Where the Opportunities Lie

Africa’s SaaS and cloud-based services sector, especially in HR, payroll, point-of-sale, mobility and SME digitisation, aligns closely with private equity’s appetite for annual recurring revenue models.

Fintech infrastructure also stands out. Payments, KYC and AML services, agency banking networks and API-based platforms generate recurring revenues that private equity funds find highly attractive.

Digital logistics and supply chain platforms represent another key area. Africa’s fragmented and often informal markets offer rich opportunities for regional consolidation, a strategy that private equity firms excel in executing.

In addition, B2B marketplaces and TradeTech platforms become increasingly appealing once they approach breakeven, as their predictable margins suit the private equity model.

How African Founders Can Attract Private Equity

The report’s findings translate into clear action points for African founders. Profitability and efficient growth must be prioritised, as global private equity investors will not engage with businesses that burn cash without a clear path to margin improvement.

Financial discipline is also critical. Private equity due diligence is exhaustive, so founders should maintain audited financials, transparent segment reporting and robust KPI tracking.

A regional expansion narrative is another key factor. Private equity funds prefer companies with the potential to scale across multiple markets. Given Africa’s linguistic and regulatory diversity, founders must present clear cross-border strategies.

Founders should also be prepared for partial liquidity events. Private equity transactions often include founder rollovers and incentive structures that balance short-term liquidity with long-term upside.

Finally, readiness for mergers and acquisitions can be a differentiator. Mapping out potential acquisition targets, even small ones, signals that a company is prepared for a buy-and-build strategy.

The Coming Wave: Global Private Equity Eyes African Tech

Although private equity activity in African technology remains modest compared to other regions, the early signs are promising. Several global private equity firms are developing Africa-focused technology strategies. Pan-African investors such as Development Partners International (DPI), Mediterrania and Adenia are increasingly exploring digital opportunities. Infrastructure-oriented funds are moving deeper into data centres, cloud services and digital connectivity, while sovereign wealth funds from the Middle East and Asia are emerging as new buyers.

With Africa projected to have the world’s fastest-growing working-age population and digital adoption accelerating, private equity firms are beginning to recognise that African technology scale-ups offer both growth and resilience.

A New Exit Era for African Tech

The VC-to-PE trend identified in Clipperton’s report is not confined to Europe. It provides a blueprint for emerging markets as well. Africa’s technology sector, now entering a maturity phase, is primed for private equity engagement.

As global liquidity tightens and investors seek durable business models, African startups that demonstrate financial discipline, predictable revenues and cross-border ambition are likely to find receptive partners in private equity. For African founders, private equity is no longer an unconventional route; it may well become one of the continent’s most reliable engines for scale, consolidation and long-term value creation.