Why African Startups Need to Build Camels, Not Unicorns
Why resilience, adaptability, and disciplined growth—not hype—will define Africa’s next generation of technology giants.
Global venture capital has a $1 billion (now $10-100 billion) obsession. Unicorns—startups valued at ten figures—have become the ultimate validation, the metric that determines which founders get magazine covers and which ecosystems get taken seriously.
But here’s what the unicorn hunters miss: optimization for one environment creates vulnerability in another.
The Evolutionary Mismatch
Consider why polar bears don’t live in tropical rainforests. It’s not that rainforests are worse than the Arctic—both are complex, thriving ecosystems. But a polar bear’s adaptations—thick fur, massive fat reserves, hunting strategies optimized for ice—become liabilities when transplanted to equatorial heat and dense vegetation.
Unicorns are economic polar bears, exquisitely adapted to capital-rich environments. Their defining traits—aggressive cash burn, hockey-stick growth projections, specialized teams, dependency on continuous funding cycles—make perfect sense in Silicon Valley’s abundant capital climate.
Transfer those same traits to African markets, and you get extinction events.
When global venture sentiment shifted in 2023, well-funded African startups that had deployed classic unicorn strategies faced brutal reality checks. Mobile commerce platform Copia and agri-focused data analytics firm Gro Intelligence both closed despite raising over $100 million each, with Gro Intelligence reaching an $850 million valuation at its last round. These weren’t Series A flameouts—these were growth-stage companies that had mastered the unicorn playbook but couldn’t survive when environmental conditions changed.
Meanwhile, companies like Moniepoint succeeded precisely because they built sustainable revenue models early, diversified their income streams, and maintained capital discipline even during growth phases.
What Desert Economics Actually Means
African markets aren’t “developing” toward becoming like Silicon Valley—they’re evolving along different trajectories entirely. Consider these structural realities:
Liquidity Cycles: African startups often face 18–36 month funding droughts where no meaningful venture capital is available. Companies that can’t generate positive cash flow during these periods simply don’t survive to the next cycle.
Regulatory Volatility: Kenya can change mobile money regulations overnight. Nigeria can alter foreign exchange rules mid-quarter. Ghana can shift tax policies on digital services without warning. Businesses built on single regulatory assumptions collapse when conditions change.
Infrastructure Brittleness: Power outages in Lagos. Internet blackouts in Nairobi. Banking system failures in Accra. Successful companies must be resilient to regular infrastructure failures that would cripple Silicon Valley startups.
Currency Risk: A startup raising dollars but earning local currency can watch months of growth evaporate in a single devaluation cycle.
These aren’t problems to be solved—they’re permanent environmental conditions requiring different evolutionary strategies.
The Camel Genome: Built-In Resilience
Popularized by Alex Lazarow in 2019, “camel startups” represent a fundamentally different approach to building technology companies. Rather than optimizing for maximum growth under ideal conditions, camels optimize for survival and steady progress under variable conditions.
Multiple Water Sources: Camels don’t depend on single revenue streams. A successful African fintech might combine transaction fees, foreign exchange spreads, lending margins, business software subscriptions, and partnership commissions. When regulatory changes kill one revenue line, others compensate.
Efficient Resource Utilization: Every input generates maximum output. Instead of hiring specialists for narrow functions, camel companies build multi-skilled teams. Instead of building proprietary infrastructure, they leverage partnerships and platforms. Instead of expanding everywhere simultaneously, they prove unit economics in one market before replicating.
Adaptive Capacity: Camels adjust their metabolism based on resource availability. During funding abundance, they grow carefully. During scarcity, they maintain operations through internal cash generation. This flexibility prevents the boom-bust cycles that kill unicorn-track companies.
The Evidence Base
Analysis shows that during 2024’s funding shift toward sustainable business models, companies like Moniepoint, Moove, and TymeBank flourished with strong growth metrics and profitability, while well-funded startups without sustainable models faced closures.
Success Stories Prove the Model:
Moniepoint: The Nigerian fintech achieved unicorn status in 2024 while operating profitably, processing over 800 million monthly transactions worth $17 billion, with revenue growing at over 150% CAGR alongside industry-leading gross profit and EBITDA margins. From day one, Moniepoint maintained the rule: “we charge for everything,” ensuring sustainable unit economics. The company diversified early—combining payment processing, business banking, lending ($70 million disbursed to thousands of SMEs), and business management tools.
iCow: This Kenyan agtech startup serves smallholder farmers through SMS-based advisory services, reaching 600,000 farmers with 60,000 active users across all 47 counties in Kenya. Research shows iCow usage increases annual milk production per cow by 13%, milk income by 29%, and household income by 22%. Simple technology, sustainable pricing, local partnerships—not a unicorn, but profitable and scaling across East Africa.
Wave (Senegal): The fintech provides low-cost mobile money services in Francophone Africa and achieved $1.7 billion valuation in 2021 by focusing on affordable, accessible financial services rather than premium features.
The Camel Playbook in Practice
Revenue Diversification from Day One: Don’t just plan multiple revenue streams—launch with them. Moniepoint started with payment processing but quickly added business banking, lending, foreign exchange, and business management tools, creating stability when individual segments face pressure.
Geographic Concentration Before Expansion: Achieve market leadership and profitability in one city or country before expanding. Moniepoint proved its model in Nigeria first, becoming the country’s largest merchant acquirer with 2.3 million businesses using their terminals, before planning African expansion.
Partnership-Heavy Operations: Build on existing infrastructure rather than creating everything from scratch. Partner with banks for financial services, telecoms for distribution, logistics companies for delivery.
Pricing for Economic Reality: Design pricing models that work for customers with irregular income and limited purchasing power. Moniepoint’s success came from offering reliable, affordable payment solutions—30% of their lending customers are accessing credit for the first time, while others receive 2–3 times more capital than from traditional institutions.
The Strategic Advantages
Camel companies develop competitive advantages that unicorns can’t replicate:
Market Intimacy: By focusing on profitability from early stages, camels develop deep understanding of customer willingness to pay, optimal pricing strategies, and sustainable customer acquisition costs.
Operational Excellence: Resource constraints force innovation in efficiency. Moniepoint’s thorough KYC processes result in low default rates for lending, while strategic PoS terminal deployment ensures high utilization rates.
Resilience Premium: During market downturns, camels continue operating while unicorns struggle. This creates opportunities to acquire talent, win customers, and gain market share when competitors are distracted by survival.
Building Anti-Fragile Architecture
Smart legal and financial structuring amplifies camel advantages. Clean cap tables with reasonable liquidation preferences preserve founder control during difficult fundraising periods. Multiple banking relationships across different currencies provide financial resilience. Strong supplier contracts with clear payment terms maintain operations when cash flow tightens.
Companies like Moniepoint manage foreign exchange risk by accounting in dollars while earning in naira, using international expansion to diversify macroeconomic exposure.
The Bigger Picture
The most successful African technology companies of the next decade won’t be unicorns that happen to survive African conditions—they’ll be camels specifically engineered for African opportunities.
Africa’s fintech sector has nearly tripled since 2020, improving access to finance across the continent, but sustainable growth requires different optimization strategies. As one local investment firm partner noted: “We are still only scratching the surface.”
These companies will build sustainable businesses serving African customers, then discover their models work brilliantly in Southeast Asia, Latin America, and other emerging markets. They’ll be global from inception, not because they raised venture capital in multiple countries, but because they solved problems common across developing economies.
The choice for African founders isn’t between camels or unicorns—it’s about building businesses that can eventually become both. The most successful African companies will likely start as camels, focusing on sustainable unit economics and resilience, then evolve into unicorns when market conditions and business fundamentals support that transition.
Even Africa’s existing unicorns are learning this lesson. Flutterwave, valued at $3 billion, recently shifted focus to profitability before pursuing its planned IPO, acknowledging that sustainable growth trumps valuation alone.
The goal isn’t to avoid unicorn status—it’s to earn it through sustainable means. Build for the desert you’re in first, then use that foundation to eventually thrive in any environment. The companies that master this sequential approach won’t just survive—they’ll define the next generation of global technology leaders.