Founders Factory Africa Liquidation Signals Donor-Dependent Startup Model Fragility

Africa's startup ecosystem faces significant challenges as Founders Factory Africa, a venture studio that launched over 55 startups across 11 countries, collapsed after a fallout with the Mastercard Foundation, highlighting risks in donor-funded models and raising questions about accountability and sustainability. Meanwhile, India's startup funding dropped by 38% year-on-year in Q3 2025 to $2.1 billion, yet IPO activity remains robust with major companies like Infra.Market and PhonePe preparing for large public offerings, and some venture funds continuing to close, indicating cautious optimism. The travel startup sector experienced modest funding rounds mostly at pre-seed and seed stages, with some larger Series C investments reflecting continued interest in AI and automation technologies despite global uncertainties. Additionally, AI-driven marketing startup MAI raised $25 million in seed funding to help small and midsized businesses leverage performance marketing, reflecting growing investor interest in AI applications for SMEs. Entrepreneur Mark Cuban cautioned startups against chasing superficial revenue milestones, emphasizing the importance of sustainable growth, profitability, and careful cash management, advocating for bootstrapping to maintain ownership and avoid pitfalls of fundraising. These developments collectively illustrate the mixed signals in global startup funding landscapes amid evolving investor priorities and economic uncertainties.