African Tech Funding Reveals Underlying B2B Strength Amidst B2C Narratives

Stephen Deng, a General Partner at DFS Lab, has reiterated his long-held view that the perceived Business-to-Consumer (B2C) opportunity in African tech is often premature, with many funded ventures ultimately relying on Business-to-Business (B2B) heavy operations. "As I've said for the last year, the b2c opportunity is simply early," Deng stated in a recent tweet. He added, "All these b2c stable narratives getting funded in Africa are b2b heavy after you look under the hood."

Deng's observation highlights a critical nuance in the African tech ecosystem, where companies often present a consumer-facing facade while their core revenue generation and operational strength lie in serving other businesses. This perspective aligns with his previous discussions on the "B-Side of African Tech," emphasizing the importance of physical ubiquity and robust supply chain solutions (B1 and B2 models) over purely digital consumer plays in a continent with unique infrastructural challenges and consumption ceilings. He suggests that building for physical ubiquity, like agent networks and localized fulfillment, provides a more sustainable path.

Recent trends in African tech funding further support the increasing prominence of B2B models. While fintech continues to dominate investment, many successful fintechs and e-commerce platforms have significant B2B components. Corporate sector spending power, enhanced scalability, and higher investor appeal due to more predictable revenue streams are driving this shift, as businesses seek tailored solutions to streamline operations.

The year 2024 saw significant developments reflecting this trend, including the merger of Kenyan startup Wasoko and Egypt's MaxAB, creating Africa's largest B2B e-commerce platform. This consolidation underscores the strategic importance of serving the vast informal retail sector through B2B solutions. Similarly, many fintech companies, while enabling consumer transactions, build critical infrastructure and services for merchants and enterprises, blurring the lines between B2C and B2B.

Investors are increasingly drawn to B2B models in Africa due to their potential for sustainable growth and lower customer acquisition costs compared to direct-to-consumer ventures. The shift indicates a maturing ecosystem where startups are focusing on foundational solutions that address systemic challenges in logistics, payments, and enterprise software. This strategic pivot is positioning African startups as key players in the continent's economic transformation, focusing on long-term digital advancement and resilience.