When Victoria Olayide Adesanya, Founder of VOA Venture Partners, recalls how her grandmother built a business in Nigeria during the 1960s - sourcing goods from the UK and Asia - she notes that her grandmother relied on trusted local partners to navigate international markets and regulations.
Six decades later, foreign venture capitalists are catching up to what the African diaspora has always known: success in Africa starts with trusted local partners, where markets shaped by nuance and networks reward those attuned to local realities.
"Africa is not one market but a mosaic of countries, regulations, and cultures," says Adesanya. "Without local partners, investors often miss the nuances that drive adoption and scale."
That realization is reshaping how foreign capital flows into Africa's startup ecosystem. From French VCs partnering with Ivorian accelerators to Japanese funds teaming with Nigerian VCs, the new playbook centers on collaboration rather than colonization. And the results are starting to show in portfolio returns, market penetration, and – critically - exits that have long eluded African venture capital.
The partnership surge
The numbers tell the story. In November 2023, Japan's SBI Holdings committed $40 million to anchor multiple Novastar funds across Africa. That same year, French VC Ring Capital launched Ring Africa, a €50 million fund targeting francophone West Africa in partnership with Mstudio, a local startup studio in Abidjan.
Earlier, in 2022, Nigeria's Verod Capital teamed up with Japan-based Kepple Africa to form a joint VC fund. And French development bank Bpifrance has been working alongside Egypt's Sawari Ventures to deploy capital into North African startups.
These aren't one-off experiments. They represent a fundamental shift in how foreign investors approach African markets - moving from transactional check-writing to genuine partnerships that blend global capital with local knowledge.
"Navigating the African investment landscape requires more than capital," says Nima Yussuf, COO at Silverbacks Holdings. "It demands deep local expertise and trusted partnerships that reveal market realities often invisible from a distance."
Silverbacks has built its entire model around this philosophy, deploying capital through partnerships with local general partners and angel investors who surface opportunities that wouldn't show up in a Sand Hill Road inbox. The returns validate the approach: Omniretail, discovered through local angels, has generated a 5x return while connecting over 150,000 retailers and processing more than $800 million in transactions. Lemfi, a Visa-backed fintech serving the diaspora, has delivered a 29x return.
Those multiples matter because African VC has struggled with the perception problem that exits don't happen and returns don't materialize. Every successful exit chips away at that narrative while proving out the partnership model.
Why local partners actually matter
The case for local expertise goes beyond cultural translation. Africa's startup ecosystem is solving hyper-local challenges - smallholder agriculture finance, last-mile healthcare access, informal retail supply chains - that require understanding systems foreign investors have never encountered.
"Many African startups are solving highly context-specific challenges that require an understanding of informal systems, consumer behaviour, and local infrastructure gaps," explains Nakami Walunywa, Regional Director, Africa at Village Capital, which partners with locally-led Entrepreneur Support Organizations (ESOs) to source and validate early-stage founders. "Partnering with locally-led organizations helps foreign investors understand these nuances, identify genuine opportunities, and establish trust with entrepreneurs and communities."
Take Omniretail (previously Omnibiz), Silverbacks' Nigerian B2B e-commerce portfolio company that digitized informal retail supply chains. Foreign investors looking at the opportunity might have dismissed it as too fragmented, too cash-dependent, too difficult to scale. Local partners understood that Nigeria's informal retail sector represented a massive addressable market that was ripe for digital transformation.
The company now links manufacturers and distributors to small retailers while deploying fintech solutions for customers. Flour Mills of Nigeria, a manufacturing giant, both sells on the platform and serves as a key investor - a strategic alignment that only happens when local partners facilitate the right introductions and structure deals appropriately.
"Without these connections, foreign investors risk mispricing the complexity and underestimating the operational challenges," Yussuf says.
The diaspora advantage
The diaspora angle adds another dimension to the local partnership story. VOA Venture Partners' research shows that over 65% of African tech companies are led by at least one founder with a diaspora connection - someone who has lived, worked, or studied abroad or is doing so currently.
"From an African diaspora perspective, local expertise has always been essential - for entrepreneurs creating startups or for foreign investors deploying capital into the region," Adesanya explains.
"Collaborations like these don't just inject capital; they fuse contextual knowledge with global standards in compliance, governance, and technology - allowing African innovations to compete globally," she says.
It's worth noting that diaspora partnerships aren't new; they've just become more visible as migration flows, remittances, and the tech ecosystem have grown over the past three to four decades.
But the underlying principle remains unchanged: success in African markets is anchored in trusted local relationships.
Beyond fintech: Cultural exports and global reach
While fintech dominates African VC headlines and deal flow, partnerships between foreign and local investors are unlocking opportunities in sports, media, and fashion that amplify African cultural narratives globally.
Silverbacks' portfolio includes African Warriors Fighting Championship (AWFC), a local league that attracted global partners like DAZN, Stake, and Warner Bros Music. Fashion brands like Vanhu Vamwe and The Rad Black Kids are leveraging African cultural heritage with access to global distribution networks including Saks Fifth Avenue and Neiman Marcus. The Cape Town Tigers, a regular participant and recent semi finalist in the BAL/NBA Africa league, as well as finalist in a China-based CBA tournament. Forever7 Entertainment is creating acclaimed Netflix content showcasing African stories to global audiences.
These investments wouldn't happen without local partners who understand the cultural context and can identify authentic brands with global appeal. Foreign capital provides the growth runway; local expertise ensures the product resonates.
"Partnerships in sports, media, and fashion have amplified African cultural narratives globally," Yussuf notes. "These relationships build trust, open access to markets, and enable founders to navigate complex ecosystems effectively."
The due diligence dividend
One underappreciated benefit of local partnerships: better due diligence. Village Capital's CoDelivery+ model brings locally-led ESOs directly into the capital deployment process as venture partners. These organizations source, validate, and prepare early-stage founders who might otherwise remain outside traditional investor networks.
"This approach ensures that investment decisions are informed by local knowledge and that capital flows where it can create the most impact," Nakami says.
Village Capital has supported companies like Benacare in Kenya, which is expanding dialysis access for rural communities through partnerships with local governments, and Mighty Finance in Zambia, which improves financial inclusion for women-led MSMEs through tech-enabled lending.
Those are context-driven innovations that thrive when investors collaborate with local partners who understand both the needs and the opportunities on the ground. They're also deals that foreign VCs operating solo would likely miss entirely - either because they don't surface in dealflow or because the due diligence process doesn't capture the market opportunity correctly.
What comes next
The partnership model is still evolving, but the direction is clear: the future of African VC depends on collaborative capital structures that combine global resources with local insight.
"The next phase of growth in Africa won't just come from more venture capital," Nakami argues. "It will come from smarter partnerships between global investors, local VCs, and ecosystem builders that make capital more flexible, patient, and impact-aligned."
Silverbacks exemplifies that future through its long-term, patient, partnership-driven approach. The firm recycles capital through partial exits while strengthening governance and engagement within its portfolio—building confidence among limited partners and founders while creating a virtuous cycle of growth.
"This synergy allows African entrepreneurs to scale regionally and globally while attracting sustained foreign direct investment," Yussuf adds. "Partnerships that blend global capital with local expertise will define the maturity and resilience of Africa's venture ecosystem."
The ecosystem is already seeing improved governance, more liquidity options, and deeper cross-border collaboration. Platform builders in fintech, digital media, sports, and the creative economy are emerging with the scale to compete globally.
But success requires foreign investors to fundamentally rethink their approach - viewing local partners not as intermediaries or service providers but as co-creators with equal stakes in the outcome.
"When foreign investors view local partners as co-creators, we unlock more than financial returns," Nakami emphasizes. "We unlock systems of innovation built to last."
The recent developments provide early validation. The question now is whether the broader VC industry will follow their lead or continue operating with outdated playbooks that treat Africa as a frontier market to be conquered rather than a partnership to be cultivated.
The foreign VCs writing checks today are finally catching up. The ones who embrace genuine partnerships will win. The ones who don't will keep learning the hard way.