The influential accelerator Y Combinator made a splash in Africa in 2020 when it shined its light on the market and began to accept startups from the region into its cohorts. The move was huge: in this nascent market, startups especially rely on programs like these to find their feet and connect with investors, and YC is the platinum standard for that process.
Fast forward to today, though, that attention has started to look a bit fickle. These days YC is going after big problems in areas like manufacturing, defense and climate, and it has quietly reduced its focus on developing markets. Yet in Africa, some are taking this as an opportunity. Local accelerators — backed by none other than African YC alumni — are emerging to fill the gap.
The new wave of accelerators is coming at the same time that the model favored by older local startup accelerators is changing. Co-creation HUB (CcHub), Flat6Labs, Baobab Network, and MEST Africa seeded companies for years alongside global accelerators, providing a pipeline of startups for bigger investors, including foreign ones, during the venture boom. Now with foreign investors pulling away, it’s forced local players to rethink how to tap and cultivate startups on the continent.
“My opinion is that instead of shadowboxing US firms (who don’t care about Africa anyway and were merely being opportunistic), the community has to come together to fund pipeline under $1 million in a programmatic way just like Techstars, YC and 500 startups did all those many years,” wrote Iyinoluwa Aboyeji, co-founder of YC-backed Flutterwave, on LinkedIn recently.
Accelerate Africa, launched by Aboyeji, is one such initiative. With 20 startups in its portfolio already, the year-old accelerator spun off from an in-house program at Future Africa, Aboyeji’s venture capital firm (where another co-founder of Accelerate Africa, Mia von Koschitzky-Kimani, is also a partner).
Aboyeji’s ambition is to become ‘The YC of Africa’ — simply described, if not simply executed.
Indeed, African startups are currently at a crossroads. Successful African founders who have been through YC are unequivocal about the value of getting selected for programs with international profile.
“Everyone who knows me has heard me say, ‘The YC of Africa is YC,’’ Aboyeji, who also founded SoftBank-backed Andela, told TechCrunch in a recent interview. “That’s my go-to response whenever someone mentions joining an accelerator. I always tell them, ‘YC is the standard and let me help you prepare your pitch so you can apply there.’”
Yet the reality is that no African startup made it into Y Combinator’s most recent summer batch; and the three batches prior to that had just three startups each from the continent. Contrast that to years prior, when the Summer 2021 batch had 10 African startups, Winter 2022 had 23, and Summer 2022 featured 8 (and fully remote COVID-19 years had even more).
YC’s change of tune isn’t just because what it’s looking for has shifted: it’s also scaled back the size of its post-pandemic cohorts since 2022 (when at its peak it had 400 startups in one batch), and it’s gone back to in-person, with international founders in turn more susceptible to stricter U.S. visa policies. Startups in Latin America and India have also seen big declines in acceptances.
“YC has and will continue to fund startups and founders from around the world, including Africa. During COVID batches, we were funding global companies via Zoom,” a YC spokesperson told TechCrunch. “Today, we require all YC startups to move to San Francisco, which has naturally changed the composition of startups that apply to YC. We remain interested in speaking with and welcome applications from the best startups around the world.”
Prioritizing local capital, partners and public markets
Foreign funding, which includes VCs and development finance institutions, has typically made up around 77% of all venture funding in Africa over the last decade, according to the African Private Capital Association, and so the decline of foreign interest has had a direct impact on the amount invested in Africa. The first half of 2024, it said, saw the value of startup investments overall decline by a startling 65% compared to a year before.
Aboyeji believes Africa’s startups have two paths forward: continue relying on external funding sources (and hope they return); or take bold steps to build a local capital base.
“It starts with a pipeline of exceptional early-stage startups that the ecosystem and bigger companies have access to, and then it builds up from there. And I can say this confidently because I watched it happen when YC was getting built,” said Aboyeji, referring to his experience watching Erik Migicovsky, a friend and founder of Beeper and Peeble, participate in the accelerator’s early days. “I watched [YC] build and grow and become what it is today. And I think to myself, it’s possible for us to do it here.”
Some corporate VCs like Orange Ventures — linked to the French telco — exist, but local corporations have yet to embrace the venture asset class collectively.
Accelerate Africa’s aim is to forge partnerships between its portfolio companies and local banks, telcos, and others, not solely through direct equity investments, but through mentorship, resources, and services. Its aim is to get its portfolio companies to $1 million in revenue.
“We’re working closely with these corporates to create exit paths and help our companies solve problems unique to their markets rather than copying Silicon Valley’s funding model,” said Aboyeji.
There are large Africa-focused funds like Partech Africa, Norrsken22, Algebra Ventures, and Al Mada. Collectively, these have raised nearly $1 billion to invest on the continent, but they have yet to deploy extensively. Building stronger companies at the early stage will get more of them around the table with these larger investors.
There is still a question of exits. Tech listings on local African markets remain rare, with only two startups — Flutterwave and Interswitch — currently floating the idea of IPOs.
There’s AI in Africa, too.
Alongside investor appetite, startups in Africa are facing a different problem: they’ve gone out of style.
Generative AI is currently the hottest trend in tech, but Africa and other emerging markets have so far lagged behind their Western counterparts across North America and Europe when it comes to building AI startups. Tellingly, over half of the 92 African companies that have been through YC focused on fintech — the top sector in YC before AI’s boom.
Just one of Accelerate Africa’s portfolio companies, CDIAL.AI, is building a conversational AI that fluently understands and speaks African languages. The startup represents one of the few efforts from the continent and underrepresented communities to join the global generative AI discourse.
There is an accelerator now in Nigeria aiming to reverse that trend.
GoTime AI, based out of Lagos, is aimed at founders developing AI products in Africa. Using Nigeria as its launchpad, it has five startups in its cohort.
GoTime AI is the brainchild of Olugbenga Agboola, another co-founder and CEO of Flutterwave, via his early-stage venture capital firm and studio Resilience17 (R17).
“AI is the most impactful global megatrend that has emerged in the last 20 years since mobile,” Hasan Luongo, general partner at R17, told TechCrunch in an interview. “It’s still early, so we want to move this engine forward. It’s not like a copy-paste from YC, but it’s simply the recognition that it’s not just Silicon Valley that’s excited about AI.”
This underscores an interesting shift. In the past, leading startups in emerging markets have succeeded by cloning, tailoring Silicon Valley models to fit regional needs in sectors like fintech, logistics, and health tech. AI, on the other hand, is undeniably a global play, much like SaaS — a challenge but also an opportunity.
Luongo, who leads GoTime AI’s efforts, believes Africa has an opportunity to build AI products at a lower cost than in Western markets, which could make AI startups here more attractive to acquirers, especially as they command lower valuations.
“That’s our bet—that they will measure up. We’re betting on the talent here being on par with, or even better than, that in other countries while benefiting from a lower cost of operations,” Luongo argued. “Also, the companies here will likely not have high valuations, so global companies could probably pick them up for less but still get great talent and their products.”
Fixing the pipeline: Check or no check?
Unlike Accelerate Africa, GoTime AI isn’t aiming to be the next YC on the continent. Instead, the accelerator is positioning itself as a stepping stone for AI startups to strengthen their footing in accessing opportunities from early-stage investors.
The accelerator plans to expand its program across Africa and scale to accept 15 to 20 startups per cohort, depending on the success of its inaugural cohort in Nigeria.
AI applications for legal, compliance, and sales/customer relationship management—trends also seen in YC’s recent batches—feature in the GoTime AI and Accelerate Africa’s portfolios. Both accelerators are starting with two cohorts annually, though their deal structures differ significantly.
GoTime AI invests up to $200,000 in exchange for 8% equity, structured as $25,000 upfront, $75,000 at Demo Day, and $100,000 at startup’s first fundraise. The accelerator also offers its startups mentorship, workspaces, and access to API and cloud computing credits to train AI models and test products.
Accelerate Africa, which currently operates with a grant of less than a million dollars, does not provide upfront funding or take equity upon admission.
“The utility of these first two cohorts is storytelling, halo effect, community, not money. Once the money comes in, we’ll probably change the model,” said Oji Udezue, venture partner at Accelerate Africa, to TechCrunch on the accelerator’s decision to not provide funding to its startups. Instead, its sister fund, Future Africa, may co-invest $250,000 to $500,000 after the program through its standard investment process.
Despite not offering funding upfront, Accelerate Africa boasts a 1.4% acceptance rate and claims to have helped startups in its first cohort raise over $5 million. “We have a quality bar; we don’t want to build an accelerator that’s not better than YC in Africa,” remarked Udezue.
