TLcom Capital partner Eloho Omame is making a case that cuts against the prevailing gloom in African venture: the continent's technology ecosystem is not merely recovering from a funding downturn — it is compounding, according to TechCabal. The distinction matters: compounding implies that each layer of infrastructure, talent, and capital deployed in the past decade is now multiplying the returns on every new dollar invested.
TLcom is one of the continent's most active early-stage funds, with a portfolio that spans fintech, logistics, and enterprise software across Nigeria, Kenya, and beyond. Omame's thesis is rooted in what she describes as the cumulative effect of years of founder development, consumer digitisation, and the gradual maturation of exit pathways — all of which make the next generation of African startups structurally stronger than their predecessors.
The compounding argument rests on several observable trends. First-generation African tech companies — the Interswitch, Flutterwave, and Paystack cohort — trained operators who have since gone on to found or join second-generation startups with significantly more commercial sophistication. That recycling of talent and experience is not captured in a single funding figure, but it quietly raises the baseline quality of every new founding team entering the market.
On the capital side, African tech funding peaked at roughly $6.5 billion in 2021 before contracting sharply through 2022 and 2023 as global risk appetite dried up. But Omame's framing suggests the contraction may have been a pruning event rather than a collapse — weeding out companies that were funded on speculative global liquidity rather than genuine African market demand. What remains, in TLcom's view, is a more durable cohort of businesses solving real problems at price points African consumers can actually sustain.
TLcom itself closed its second fund, TIDE Africa Fund II, at $154 million in 2021 — a figure that positioned it among the larger early-stage vehicles on the continent at the time. The fund's portfolio includes Andela, the pan-African engineering talent marketplace that has since expanded globally, and Agricius, among others. The fund's construction — deliberately early-stage, deliberately pan-African — reflects a bet that the compounding Omame describes is not confined to Nigeria or Kenya but is spreading laterally across markets including Ghana, Rwanda, and Egypt.
The infrastructure argument is perhaps the most concrete pillar of her thesis. Mobile money penetration, broadband connectivity, and regulatory frameworks for digital financial services have all advanced materially since TLcom made its earliest investments. M-Pesa's transaction volumes in Kenya alone crossed $314 billion in fiscal year 2024, a number that illustrates the scale of digital rails now available to any startup building on top of them. A payments startup launching in 2025 inherits infrastructure that a 2015 founder had to build from scratch — that is compounding in its most literal sense.
For investors, the implication Omame draws is that patient, early-stage capital remains the most defensible position. Late-stage and growth capital dried up fastest during the 2022-2023 downturn, leaving companies that had scaled on cheap money stranded. Early-stage funds with long holding periods — TLcom's funds typically operate on a ten-year horizon — were insulated from the worst of that pressure and are now deploying into a market where valuations have reset to more rational levels.
For founders, the compounding thesis is both encouragement and a higher bar. It means the ecosystem around them is genuinely better than it was five years ago — more experienced angels, more specialised accelerators, more sophisticated enterprise customers willing to pay for software. But it also means that the excuse of a nascent market justifying low unit economics is wearing thin. Investors like TLcom will increasingly expect African startups to demonstrate the same rigour on retention, margin, and payback periods that their counterparts in more mature markets face.
Why it matters: If Omame's compounding thesis holds, the African tech funding cycle is not a boom-bust commodity story but a slow-building accumulation of capability — meaning investors who exit the asset class during downturns are not just timing the market badly, they are forfeiting the compound returns that early-stage African venture, at its best, has historically delivered.