Mastercard Foundation Pulls Out Of Its $100M Commitment To Top African VC Firm
Mastercard Foundation, an international nongovernmental organization, has ended its commitment to invest $100 million in 54 Collective, the most active investor in Africa.
54 Collective (formerly Founders Factory Africa) and Mastercard Foundation “will be pursuing different strategies moving forward, and the partnership will end on 30 April 2025,” the venture capital firm told Rest of World in an email.
A setback for Africa’s most active investor
On February 20, the leadership team of 54 Collective informed staff that the new changes would lead to layoffs as the firm would end its entire venture studio team. This includes employees that supported its portfolio companies on product, technology, marketing and growth, human resources, and business development, according to three senior company officials who attended the meeting who spoke to Rest of World.
“The Mastercard Foundation remains committed to its Young Africa Works strategy to see 30 million young people, especially young women, access dignified and fulfilling work by 2030.” Daniel Hailu, executive director of pan-African programs at the Mastercard Foundation, told Rest of World in a statement.
The announcement follows a decline in African startups securing investments over $100,000 in 2024. 54 Collective was the only investor involved in more than 20 financing deals of over $100,000 last year. The other top two investors who had previously made the list in 2023, 2022, and 2021 were Techstars and Launch Africa.
54 Collective and Mastercard Foundation
Headquartered in South Africa, 54 Collective was founded in 2018 and has invested in over 70 startups. The firm merges venture studio and venture capital models by giving early-stage founders in Africa investment and mentorship, and working with large organizations and impact investment firms to fulfill its services. Some of the company’s partners include South Africa’s Standard Bank, South African health-care company Netcare, and the Dublin-headquartered Small Foundation.
It gained its most significant funding in August 2023, when the Mastercard Foundation and Johnson & Johnson Impact Ventures pledged to invest $114 million in the VC firm to expand its “unconventional VC model” and better support founders across Africa. Over five years, the firm received $20 million per year from the Mastercard Foundation.
In an email, the company told Rest of World that the Mastercard Foundation funding was pivotal to its business. Even though senior executives said the company will likely cut its core investment team across its offices in Kenya, Nigeria, and South Africa, 54 Collective shared it will continue to invest as usual.
Image: Adedoyin
