Inflation, funding challenge stressing startups in Nigeria, Egypt

Inflation and fundraising challenges have been listed as major challenges stressing startups in Nigeria and Egypt.

Specifically, 66 per cent of founders in Nigeria listed inflation as a top stressor while it is 57 per cent in Egypt. In Kenya, it is 17 per cent.

This was revealed in a new report, titled: ‘Passion and Perseverance: Voices from the African Founder Journey’, by Flourish, which noted that Africa is home to a burgeoning startup community with a rapidly growing number of early-stage founders, investors, accelerators, and other stakeholders from across the venture capital ecosystem.

According to it, founder motivation and drive are high, and the potential for success is immense, but so is the pressure, saying navigating the fast-paced startup environment can be gruelling as founders face high stress, challenging macroeconomic conditions, and long hours.

Flourish said it conducted this survey, with responses from more than 160 startup founders across 13 African countries and more than a dozen interviews, to deliver the first-ever, wide-scale research on the founder wellbeing journey in Africa, spotlighting founder voices and shining light on the experiences of early-stage entrepreneurs across the continent.

The report noted that facing global economic shifts and local volatility, founders are
navigating a landscape fraught with stress and uncertainty. The top three sources of stress come from external, macroeconomic challenges —and while the founder journey is always challenging, prioritising well-being is even more pressing amid difficult market conditions.

Within the sub-region, external challenges took centre stage, where 59 per cent of founders pointed towards the challenge of raising funds as topmost; 44 per cent said inflation and currency devaluation and 40 per cent pointed in the direction of other macroeconomic challenges.

The report, however, noted that other everyday stressors of the startup journey pushed to the background include company management, 32 per cent, co-founder relationship, 21 per cent and investor relationship, 16 per cent.

Co-founder, Andela and Flutterwave, Founding Partner, Future Africa, Iyinoluwa Aboyeji was quoted as saying: “The external stressors – factors largely outside our control – are big contributors to stress and burnout for most entrepreneurs. As an investor, I try to help my founders focus on what they can control and let go of what they cannot.”

Further, the report observed that female founders navigate greater isolation and unique stressors. Flourish observed that women report distinct stressors that extend beyond typical business challenges.

According to it, loneliness, work-life balance, and fear of failure emerge as disproportionately significant stressors for female founders.

The report said loneliness or isolation accounted for 44 per cent of the stress faced by female founders, work-life balance, 53 per cent and fear of failure, 53 per cent.

Partner, Asphalt & Ink and Co-founder, WomenWork Kenya, Isis Nyong’o Madison, said: “Female founders need more equitable representation and visibility in the VC ecosystem, as well as access to peers who truly understand their unique experiences.”

According to the report, founders vary in their willingness to be open about their stress. It noted that startup founders often feel pressure to project confidence and success, both to protect their team from undue anxiety and to avoid appearing weak.

The report said this need to maintain a polished exterior can hinder their ability to be fully open and honest about the challenges they face, potentially at the expense of their well-being.

Accordingly, founders are less likely to discuss stress with peers or mentors. Flourish said
founders frequently turn to family and friends during challenging times, relying on close relationships to provide emotional backing and a sense of connection.

“Yet, loved ones often lack the direct experience or business acumen needed to offer well-informed advice tailored to the unique challenges faced by entrepreneurs. Many founders hesitate to discuss their stress with peers or mentors. This reluctance can lead to isolation and exacerbate the pressures of entrepreneurship, making it increasingly difficult to navigate the complexities of their journey. By openly sharing their struggles, founders can foster closer relationships and create a vital support system, helping them feel less alone with the challenges they face,” the report noted.

The report said 81 per cent of founders said they talk to family and friends about stress; 45 per cent, co-founders; 42 per cent, other startup founders and 22 per cent, mentors.

Managing Partner, Launch Africa Ventures, Zachariah George, said: “Creating a trusted support network is essential. A big component of entrepreneurs’ stress comes from feeling alone.”

The report discovered that entrepreneurs hesitate to consult with a professional coach or therapist. Flourish said only 25 per cent of founders seek professional help from a coach or therapist.