Why the venture studio model suits Africa

A venture studio is a company that makes companies. Instead of waiting for founders to arrive with an idea and then writing a cheque, a studio comes up with the idea itself, builds the first version with its own team, finds early customers and only then spins the business out with its own leadership and, usually, its own investors.

Next Foundry is a venture studio, so we have an obvious interest in the model. That is exactly why we wanted to look at the evidence honestly, including where it is thin and where studios have failed.

What the global numbers say

The figures most often quoted come from the Global Startup Studio Network's 2022 research, usually cited second-hand. As summarised by the consultancy Bundl, studio-built startups reached Series A in about 25 months, against 56 months for traditional startups, and 72% of them got to Series A compared with 42% of conventional ventures. The same summary reports an average internal rate of return of 53% for studios, against about 21% for traditional venture funds.

Those numbers are striking, and they should be treated with care. We could not locate the original report, the sample is self-selected, and studios that fail are less likely to answer surveys. A fair reading is that studios appear to get companies to market faster and with better early survival, but the exact multiples should not be taken as settled.

What is not in doubt is that the model is spreading. CB Insights data cited by StartupStudios.com shows the number of active studios worldwide rising from 102 in 2014 to 338 in 2020.

Studios in Africa

The most useful recent source is a 2026 white paper on venture studios in Africa by the Dutch development bank FMO, Germany's GIZ and the research firm Briter. It looked at a cohort of more than 40 active studios, three-quarters of them headquartered on the continent.

Its headline findings, as presented on FMO's summary page, are encouraging. About one in two studio companies raised follow-on funding, compared with one in five from traditional incubators. Studios cut the time to being ready for a seed round by roughly a year. And 90% of studio-built companies went on to raise commercial equity or debt.

A few examples show the range of approaches:

• Delta40 started in Kenya, expanded to Lagos and announced a US$20 million final close for its studio and fund in early 2026, backed by 54 investors from 13 countries. It writes initial cheques of US$100,000 to US$500,000.
• FirstFounders in Nigeria has deployed about US$1 million across seven startups since 2020, five of them focused on AI. TechCabal reports that Nigeria now has more studios than any other African country.
• Mstudio in Côte d'Ivoire built five of the ten best-funded Ivorian startups in 2024, according to Launch Base Africa.

Why the model fits here

The reasons are practical rather than ideological.

Capital is scarce and late

African startup funding is concentrated in four countries and a small number of large deals. In markets that see little venture capital, a founder may have to survive for years before an institutional investor takes notice. A studio can fund that early stretch itself and share the cost across several companies.

The hard parts are the same every time

Every new software company in a smaller African market has to work out how to take card and mobile money payments, how to price in several currencies, how to host data responsibly and how to sign contracts that customers in other countries will accept. Solving those problems once and reusing the answer is the core economic logic of a studio.

Experienced operators are rare

There are relatively few people on the continent who have taken a software product from zero to thousands of customers. A studio lets that experience work across several companies at once, instead of being locked inside one.

Products can share customers

A business that uses one studio product to manage its field team may also need help answering customers online, or financing a building project. When ventures share a parent, they can introduce each other, share data responsibly and cross-sell.

The cautionary tale

Studios can also fail, sometimes spectacularly. Founders Factory Africa, later renamed 54 Collective, was one of the continent's best-known studios. It launched dozens of startups across many countries with a large commitment from the Mastercard Foundation. In 2025 that partnership ended and the studio was wound down. TechCabal reported that its startups had created more than 17,500 direct and indirect jobs, and Fast Company South Africa described the studio being forced into liquidation after disputes with its main funder.

The lessons are clear enough. A studio that depends on one funder is fragile. A studio measured by how many startups it launches, rather than how many survive and earn money, can grow faster than its companies can. And a studio that does not own meaningful stakes in its ventures has little to fall back on when grants dry up.

The studio model is not a guarantee. It is a way of stacking the odds: building on shared foundations, getting to customers sooner and giving each company more than one person's savings to survive on. In a funding environment like Africa's, those odds matter.