The global funding slowdown has particularly hit African startups hard, with venture funding seeing almost a 40% year-on-year decline when comparing 2023 and 2024, according to Africa: The Big Deal.
While sectors like AI, healthcare, and financial services globally have seen recoveries in investor interest, African startups face a differently challenging environment.
From the continent’s perspective, African investors are stepping up to fill the gaps left by slower and retreating foreign capital over the last two years, and according to Semafor, recent data from several funds reveals that over half a billion dollars in capital remains available for startups to access and further the continent’s innovation.
Startups need more than innovative products to unlock this funding—they need a proactive approach to visibility and storytelling.
Who is Best Positioned to Attract Funding?
As the funding winter forces startups to become leaner, a triggering natural selection process kicks in to balance the excesses of the investment boom in prior years. The startups that thrive in this environment and garner investor interest are those that can survive through operational efficiency, maintain consistent visibility, and demonstrate a clear path to sustained long-term growth.
The influx of capital in past years highlighted the continent’s potential for innovation and growth, and this potential remains valid today, with continuous advancements in the talent pool and infrastructure. However, visibility is now as critical as performance.
Amplifying positioning efforts should not be limited to fundraisers. Startups can leverage communication opportunities by identifying key data points and translating complex issues into compelling content.
By leveraging data to tell authentic stories, startups can identify metrics from their operations and turn these into compelling narratives that resonate with stakeholders. For example:
- Piggyvest’s savings report campaign effectively communicated the company’s “why,” showcasing its impact on a growing youthful population and reinforcing its value proposition.
- Chowdeck’s strategic use of metrics: Leveraging its milestone of surpassing 600,000 users in August to strategically enhance its advertising efforts and user engagement.
Startups must embrace storytelling to humanise their brand, highlight achievements, and affirm their relevance in an increasingly competitive market. Transparent communication about challenges and milestones fosters trust with both investors and the public, solidifying credibility.
As funding rounds grow more cautious, startups must go beyond showcasing fundamentals like product-market fit and integrate strategic communication plans. By weaving public relations and consistent messaging into their core strategy, companies can stand a better chance of remaining top-of-mind for investors, users, and the broader ecosystem.
What Can Startups Do Differently?
Simply doing the work is not enough; startups must also talk about it. Sales and communications should not be competing priorities – instead complementary parts that together drive longstanding growth. As the year wounds up, startups need strategies that align communication efforts with company goals such as:
Developing a Comprehensive Communications Plan
- Quarterly or yearly planning ensures that campaigns and messaging remain consistent with timely business objectives, providing a tailored and cohesive approach.
- Using brand communications to stand out in a saturated market effectively by highlighting unique value propositions to capture the attention of investors and customers.
- Demonstrating business maturity by showcasing not only the products but also the company’s values, people, and growth trajectory to convey depth.
Sharing Milestones, Progress and Lessons Learned
- Moniepoint, the latest unicorn, frequently shares user-centric narratives, including its 99.9% transaction success rate, which inspires confidence and loyalty among its everyday users. These users describe the company and its suite of solutions as one of the most inspiring in recent times.
- Highlighting challenges overcome can position startups as resilient and capable, qualities investors value in uncertain times. It could also give room for partnerships, mergers and countless opportunities.
Align Communication with Ecosystem Trends
Startups should also address ecosystem-wide challenges and opportunities. For example, identifying timely communication opportunities that highlight their role in tackling key issues such as financial inclusion, renewable energy, or supply chain inefficiencies can appeal to impact-driven investors. Startups that align their messaging with broader industry priorities are more likely to stand out in the competitive funding landscape.
The Way Forward
In a funding winter, the startups that come out on top are not just those with the strongest fundamentals but also those that are deliberate about their visibility. Beyond securing funding, building trust and transparency through strategic communication creates opportunities for growth, strengthens their position within the ecosystem, and lays the foundation for lasting success.
McKinsey reports that companies with effective communication strategies outperform their competitors by 3.5 times. By leveraging data-driven storytelling, creating robust communication strategies, and aligning with ecosystem priorities, African startups can thrive even in challenging times, proving resilience and unlocking their full potential.
Temi Faseyide is a Comms/PR Manager at InsiderPR where she advises startups and firms on overall communication and positioning goals.
*All views expressed here are the author’s own and do not necessarily reflect the editorial stance of The Kenyan Wall Street.
