Investors losing confidence in African tech startups due to poor structure, says Stellar Eminence CSO

Kayode Alatise, chief strategy officer (CSO) at Stellar Eminence, says the lack of good internal systems is weakening investor confidence in African startups.

Alatise spoke on Friday at Future X 2025, themed ‘Empowering Africa’s Development Through Technology,’ and organised by Stellar Eminence in Lagos.

He said capital remains important for the growth of young companies, but argued that “good systems” are even more crucial.

The CSO noted that compared to global markets, Africa’s tech ecosystem still raises amounts that “look like a drop in the ocean”.

“That says a lot. Due to lack of good systems, investors are losing confidence in African tech startups,” the strategy officer said.

He referenced an investor’s recent public complaint that some founders he supported diverted funds to purchase cars, noting that such incidents damage confidence in the ecosystem.

“What systems and structures are we placing in these businesses to protect funds from founders? What systems are we putting in place to ensure that those type of things don’t happen?” he questioned.

The CSO said tech businesses should adopt the same corporate governance standards expected in more traditional sectors — including strong board of directors and a culture of accountability.

He also stressed the importance of broad-based shareholding and well-structured cap tables to prevent any founder from becoming “the alpha and omega” of a company.

“When it comes to decision-making, hiring, firing and spending money, there should always be a system that ensures these things happen after deliberation and consultation,” Alatise said.

The strategy officer also called for proper documentation of processes so companies can function even when key personnel are unavailable.

Alatise said building such systems should be an ongoing process that begins from the earliest stages of a startup’s life.

He also called on founders to prioritise structure and run their start-ups with seriousness and intention.

’SOCIETY SHOULD ENCOURAGE WOMEN IN TECH’

Also speaking, Emmanuel Samuel, a talent recruiter in the tech space, addressed the gender gap in the tech ecosystem, highlighting the importance of both personal interest and supportive environments for women and girls.

Samuel said tackling the issue requires a dual approach — one that focuses on women themselves and another that addresses societal norms.

He noted that while technology can be challenging, passion and interest can help women overcome obstacles.

“It is hard but if you are actually interested in it, that passion will help you even when you are tired,” he said.

On the societal side, he stressed the need for a level playing field.

“The society should encourage as many females that are interested in the tech ecosystem to actually pursue their dreams,” Samuel said.

 Speaking on how technology could be made more accessible and affordable for small and medium enterprises (SMEs), he suggested that African developers should build products specifically for local markets.

The talent recruiter said the approach not only makes the products more affordable but also ensures they address real challenges that exist in the African market.