Africa's startup ecosystem is facing a critical early-stage funding crunch, threatening the growth of the continent's next big tech successes. This was the key takeaway from a panel discussion at GITEX Africa 2025, where leading investors gathered to address the capital gap hindering African startups.

The panel, titled "The Early-Stage Capital Crunch: Who's Funding Africa's Next Unicorns?", featured a diverse array of investors and venture builders, including representatives from 500 Global, Plug and Play, Beltone Venture Capital, Briter Bridges, and more. They converged to tackle the pressing issue of early-stage capital gaps across the continent.

According to Mareme Dieng, Partner at 500 Global, the problem lies not in the availability of funding at the Series A and B stages, but rather in the early stages of the startup lifecycle. "Investors are under a lot of risk pressure," she said. "But deals aren't flowing in the early stages. There are real concerns about market capacity and the ability to build strong pipelines."

The panelists agreed that the African ecosystem faces unique structural constraints, which require a different approach to early-stage funding. "VC is a risk-driven asset," Mareme emphasized. "If we want to see change, we need to change our approach." Dario Giuliani, CEO of Briter Bridges, added that the narrative around Africa is changing, with more early-stage capital available than ever before, but it needs to reach the right places.

Thomas Bigagli, Partner EMEA at Plug and Play, highlighted the disjointed investment map in Africa, where some countries attract significant investment while others are left behind. He called for targeted measures to close this gap, emphasizing the need to identify and support founders in underfunded regions.

The panel also offered advice to founders and investors. For founders, the message was clear: focus on building a sustainable company, and the funding will follow. "Be clear about what you're building," Dario Giuliani urged. "Not everyone needs to raise money to grow. Ask yourself: Can I scale slowly and sustainably, or do I need external funding now?"

For investors, the panel encouraged a rethink of their strategy, adapting to the local market and being innovative in their financing approaches. "You can't simply apply the US deal structure to Africa," Thomas Bigagli said. "You need strategies tailored to the local market."

Despite the challenges, the tone of the panel was optimistic, with a consensus that Africa has the talent, ideas, and markets to support its next unicorns. What's needed now is smarter capital, broader participation, and a shift from copycat strategies to Africa-centric innovation models. As Dario Giuliani concluded, "Africa was once underserved. Today, it's on the radar. The opportunities remain enormous, and we're just getting started."

The discussion at GITEX Africa 2025 serves as a wake-up call for the African startup ecosystem, emphasizing the need for a collaborative effort to address the early-stage funding crunch and unlock the continent's full potential.