A Major Shift for African Startup Ecosystem
54 Collective, the venture firm formerly known as Founders Factory Africa, is set to shut down its venture studio operations in Africa. This decision comes as its partnership with the Mastercard Foundation is set to end on April 30, 2025.
The closure marks a significant shift for 54 Collective, which has been instrumental in supporting over 40 startups and creating more than 17,500 jobs through its venture studio and accelerator programs.
Why is 54 Collective Shutting Down Its Venture Studio?
The shutdown is primarily due to the end of the Mastercard Foundation’s funding partnership with 54 Collective. While both organizations have been aligned in their mission for years, they are now pursuing different strategies.
Despite efforts to secure alternative funding, 54 Collective—officially known as Africa Founders Ventures (AFV)—has been unable to maintain financial support to keep the studio running.
Employees were officially informed of the closure on Friday, and a redundancy consultation process is expected to follow.
The Impact on Startups and the African Tech Space
54 Collective’s venture studio and accelerator programs have played a key role in shaping Africa’s startup ecosystem. By backing dozens of startups and training entrepreneurs, the firm has contributed significantly to innovation and job creation across the continent.
However, its closure raises concerns about the availability of structured startup support programs in Africa. Many early-stage ventures rely on such studios to build, test, and scale their businesses with hands-on mentorship, funding, and strategic guidance.
The lack of alternative funding options for the studio means that African founders who would have benefitted from its resources will now need to look elsewhere.
What Happens to 54 Collective’s Venture Capital Funds?
Despite shutting down its venture studio, 54 Collective’s $40 million venture capital fund, UAF1, remains active and will continue to invest in African startups.
Additionally, the firm holds a separate multi-million-dollar fund raised in 2023 that focuses on supporting its portfolio companies and addressing gender disparities in venture capital.
While the closure of its venture studio marks a setback, 54 Collective’s investment arm will continue to play a role in the African tech ecosystem.
SEE ALSO: Founders Factory Africa Rebrands as 54 Collective
The Future of African Startup Support
As the African startup landscape continues to grow, the loss of a major venture studio like 54 Collective leaves a gap in the ecosystem. However, it also presents an opportunity for new venture builders, investors, and accelerators to step in and fill the void.
Startups and entrepreneurs may need to explore alternative funding and support structures, including:
- Other venture studios and accelerators across Africa
- Corporate innovation programs
- Government-backed startup initiatives
- International investors focusing on Africa
Despite this challenge, Africa’s startup ecosystem remains resilient. With increasing venture capital interest and a young, tech-savvy population, the continent is still positioned for long-term growth in the digital economy.
Conclusion
54 Collective’s decision to shut down its venture studio operations is a major development in the African startup landscape. While it signals the end of an era for one of the most impactful startup-building programs, its investment funds remain active, ensuring that African founders still have some access to critical capital.
As African entrepreneurship evolves, new opportunities for funding and innovation will emerge. While the closure is a setback, it is also a chance for new players to step up and support Africa’s growing wave of startups.
