Venture capital funds investing in African fintech businesses must adopt a “founder-friendly” approach if they are to grow, says Linda Rottenberg, CEO of Endeavor, which mobilises investment capital with a particular focus on fintechs.
If entrepreneurs at the scale-up phase after their seed rounds own less than 50% of the business they are at a disadvantage, she told Business Times at the Endeavor Africa Day in Stellenbosch this week.
“When the going gets rough, and the going always gets rough with entrepreneurship, is your first instinct to back the founder in making difficult choices or to fire the founder and start from scratch?
“Firing the founder and starting from scratch [is] the first instinct of a lot of the investors we’ve seen in the country, and there are too many cases where as soon as tough times happen, the founder is roasted … and the companies didn’t grow.
“The founders are just ousted, and then the investors can’t run the company. They don’t have the founder mentality, and then [the companies] have not done well.”
She encouraged investors to work with founders through tough times.
In one example of venture capitalists overreaching, she said an African founder discovered that he was being ousted from his own business when he saw an advert for his position posted on LinkedIn.
About R13.35bn was invested in 1,325 venture capital deals in 2024, representing a 24% increase in 2023, according to the Southern Africa Venture Capital Association’s (Savca) 2025 survey.
Global capital has been missing in Africa, which has a high level of talent, skills, and a burgeoning consumer base, she said.
“I co-founded Endeavor 28 years ago to identify and help scale high-growth, high-impact entrepreneurs in emerging markets. I was known as chica loca, the crazy girl, for suggesting there were high-growth entrepreneurs in emerging markets.”
Among the South African companies that have worked with Endeavor is Tyme Bank, which Endeavor is helping expand into markets such as the Philippines, Vietnam and Indonesia in Southeast Asia. It also assisted Go1 founder Melvyn Lubega, who mentored Pineapple Insurance through Endeavor.
“South African models like Tyme Bank, looking at Southeast Asia … that’s where these are huge success stories.
“If you look at Yoco, if you look at Carry1st … [I have seen South Africans] looking to the continent much more. I think that’s what’s exciting to me… You should be able to export to other similar markets.”
High-growth and high-impact entrepreneurs well-placed to drive growth and job creation in South Africa
— Linda Rottenberg
Endeavor was started in Argentina in 2004. Its first market outside of Latin America was South Africa; today it operates in 50 markets. Rottenberg said high-growth and high-impact entrepreneurs were well-placed to drive growth and job creation in South Africa, the region, and globally.
“Through the selection process that we’re here for, we’ve selected 3,000 high-growth entrepreneurs, screened from over 60,000. Those entrepreneurs, by the end of this year, will generate $100bn in revenue, they’ve generated over 4.5-million jobs — and we have nearly 100 unicorns, or $1bn-plus companies in the network.”
Investors and entrepreneurs from around the continent and the world gathered at the Spier wine estate to discuss opportunities for venture investing in Africa.
Nicola Gubb, interim executive director of Savca, called the gathering “a compelling story of resilience”. The technology sector continued to lead the way, accounting for nearly two-thirds of total investment, she said.
“Behind these numbers lies the story of a maturing market, more sophisticated capital deployment, deeper investor networks and an encouraging shift towards early-growth-stage funding, which speaks to a growing confidence in scalable local innovation.”