Spending time with investors and operators in the US, AI and the SpaceX IPO dominated my conversations. It was a reminder that where you live defines your reality. Conversations were focused on the AI race, potential Anthropic IPO, and where SpaceX will trade after the lock-up period. No one knows, but everyone is planning. I focused my updates on Raba’s founders, emphasizing just how large, fast-growing, and profitable financial services businesses in Africa have become. To test perceptions, I asked otherwise sophisticated investors and operators a simple question: what is the market cap of Capitec — a consumer financial services company that operates in a single country, South Africa, home to 65 million people and a GDP less than half the size of Ohio's? The answers were telling. A successful technology founder who left South Africa for an undergraduate degree at Stanford — with plans to move home one day and build a company — guessed 1 billion rand, about $62 million. Two venture investors focused on African technology companies guessed $1 billion and $2 billion, respectively. Capitec's market capitalization on June 30th was $33.6 billion — more than 540x the South African founder's guess, and more than the combined value of Circle, Klarna, and Chime!
See infographic below.
Perceptions are obviously skewed. You can understand why most investors won't spend a minute on a market they assume has little to no scale. How do we change the commonly held perception? Narratives can take you only so far. Results are what ultimately matter, and several African tech darlings have turned into, well, duds. And there's an important detail here: some of these companies not only raised significant equity capital, they did so with very broad groups of investors that included a long tail via SPVs (special purpose vehicles) — so the underlying exposure to these companies includes, by definition, a very broad group of now-disappointed investors. Given the hundreds of millions of dollars raised by these companies, their failures were not a capital problem.The counterpoint to these high profile failures is a group pre-IPO fast-growing profitable fintechs that remain largely unknown to investors. They have reached scale with curated cap tables that consist of a smaller group of partners. These notable successes include companies like [stealth](backed by venture capital firms xxx, xxx and xxx, as well as xxx) and [stealth] (mainly backed by investment firm xxx). Most US investors know very little about [stealth] — or [stealth], for that matter (try looking up revenue/growth information on [stealth] online). These and others we track are companies that clear a very high bar: high growth (50–150% YoY), at or nearing $1B in annual revenue, attractive margins and durability.
Many of the pre-IPO companies we track have sustained high growth, and some have accelerated — rare for businesses to do as they scale. We shared in our 2025 review that we were a few years away from IPOs. We are updating that view and now expect some of these businesses to pursue IPOs in the next 24 months. The potential for liquidity will unlock other investors to engage with African markets. Also, our expectation of successful IPOs does not assume a company must list on — or raise from — US or global investors. As we noted in our recent [stealth] memo: South Africa offers an extraordinary structural advantage, with deep capital markets to support growth companies.The excerpt that we shared (slightly modified):
South Africa's capital markets represent a unique structural advantage for [stealth] long-term value creation. The JSE (South African exchange) carries $1.5 trillion in listed equity market capitalization — larger than Brazil's B3 exchange despite an economy roughly one-fifth the size. South Africa's asset management industry oversees an estimated R8 trillion ($480 billion) in professionally managed assets, with pension funds owning approximately 40% of all equities listed on the JSE. Regulation 28 requires that at least 55% of retirement fund capital be invested domestically, creating a captive institutional buyer base that sustains premium valuations for high-growth financial services companies: Capitec trades at over 30x earnings on the JSE, and Optasia's ~$345 million fintech IPO in November 2025 priced at the top of its range and was several times oversubscribed. For context, Brazil's largest fintechs — Nubank, PagSeguro, StoneCo — all listed on U.S. exchanges (NYSE/NASDAQ), likely to access growth multiples; the JSE has demonstrated it can deliver the same. This gives [stealth] (and other African technology companies) a credible, high-value listing path that does not depend on U.S. or European public markets.
A few big-picture trends worth paying close attention to:
- Kenya swapped USD debt payments into Chinese yuan, and it's reported that other African nations may follow. This is a first, and follows the broader discussion about the dollar's role in global finance.
- Global materials demand is accelerating, and many African countries hold these materials in abundance. Leaders in Zimbabwe, Namibia and Nigeria are going hard at vertical integration — putting rules in place that no raw materials will leave unrefined, with refining, value-addition and job creation now required at the source.
- Economies need energy to grow. The world's largest single-train refinery was completed in Nigeria, and several at-scale energy infrastructure projects totaling $45B are set to begin, with capital and project work led by the Dangote Group (Nigeria’s largest company guiding toward $30B in EBITDA by 2030). This podcast with the founder is worth listening to.
Below is an updated Africa-China trade flow report. Africa-China trade is catching up to US-China trade in total volume. In 2025, there were of course trade curbs that dampened the US-China figure, but the point is that the scale Africa now commands with China is worth paying attention to.
We expect this to grow materially over the decade ahead. For it to have a strong positive impact, trade will need to move up the value chain — less raw material shipped out, more refining, manufacturing and jobs created at the source (as mentioned above). Countries are aggressively legislating toward this shift.
Other:
One closing thought. I recommend reading Against the Odds, the autobiography of James Dyson — best known for the cyclone-powered, bagless vacuum. His story mirrors the arc of so many of the early-stage founders we've partnered with: you innovate, no one believes in you, the highs are high and the lows are incredibly low — and for years, no one takes you seriously. Dyson built 5,127 prototypes over roughly five years before he had something that worked, and was turned down by every major manufacturer along the way. He took a second mortgage on his home, ran up debt and credit cards, and did it with three young children — his wife, Deirdre, an art teacher, holding the family together on her salary.
It took fifteen years from that initial idea to his machine reaching UK shelves — and within two years it was the best-selling vacuum in the country!
Incredible credit to James Dyson for what he built, and the importance of a support system around you (often the partners of successful founders are the key to making it happen). It's a book I recommend to founders and investors — and one I'll likely read a few more times. I’m currently reading the book to Phillipe. Link to the book on Amazon.