Venture capital (VC) is often described as a numbers game: market research, financial modelling, risk analysis, scalability assessments, and exit potential. Yet, despite all the sophisticated metrics and analytics, there is a deceptively simple truth at its core: investment decisions hinge on trust in the founders.
By Brighton Musonza
This insight, while universally applicable, has profound consequences for Zimbabwe and the broader African entrepreneurial ecosystem. Talented innovators are abundant, from fintech founders in Harare to agritech entrepreneurs in Bulawayo. Yet, despite their ingenuity and potential, they struggle to access the capital needed to scale. Understanding why requires a deep dive into the structural dynamics of venture capital and the unique challenges facing African founders.
The Trust Gap in Global Venture Capital
In Silicon Valley and other mature VC markets, investment decisions are often influenced by what might be called “pattern recognition.” Investors tend to fund founders who resemble previously successful entrepreneurs. Historically, this has favoured graduates of elite institutions such as Harvard, Stanford, and MIT. Consider Mark Zuckerberg, Sergey Brin, and Jeff Bezos—all of whom benefited not only from extraordinary ideas but also from networks of trust embedded within elite education and professional backgrounds.
In Africa, the reverse is true. A brilliant entrepreneur in Harare or Mutare may develop a product that addresses a real market gap, but foreign investors frequently lack the trust signals they associate with traditional success profiles. In essence, African founders are required to provide more evidence of competence than their global peers simply to overcome the initial trust barrier.
The result is a stark underrepresentation of African ventures in global venture capital flows. In 2024, African VC investment totaled just over $3 billion, accounting for only 1% of global allocations. Female-led startups received only $48 million, despite the continent’s entrepreneurial base being rich in diversity and talent. For Zimbabwe, these numbers highlight both the challenge and the opportunity: the talent exists, but the investment ecosystem remains underdeveloped.
Educational Pathways: Necessary but Insufficient
One commonly proposed solution is to increase the number of African students attending top-tier international universities, thereby creating networks and credibility that signal trust to global investors. China, for example, sends approximately 300,000 students annually to the United States, many of whom secure venture backing or return with resources to support domestic innovation. Robin Li, founder of Baidu, is a prime example.
Africa, in contrast, sends only 50,000–60,000 students per year across the entire continent. While expanding these numbers is desirable, it is unlikely to solve the structural trust gap on its own. Overreliance on foreign VC perpetuates a dependency model: African startups remain subject to distant investors’ biases and risk assessments rather than benefiting from domestic support structures.
Corporate Venture Capital: The Domestic Lever
Zimbabwe has a largely untapped solution: corporate venture capital (CVC). Globally, corporate venture arms have become a central pillar of innovation ecosystems. Over 80% of Fortune 100 companies maintain CVC programs, investing in startups that align with strategic objectives and often generating substantial returns. Google’s $50 million acquisition of Android, which later yielded billions in revenue, illustrates the transformative potential of corporate backing.
In Africa, corporate venturing is nascent. Notable initiatives include:
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ShopriteX (Sixty60)
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Old Mutual Next176
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Safaricom Spark Fund
Beyond these, few large corporates actively participate in early-stage investing. Yet Africa’s top 50 companies collectively control over $500 billion in assets. Even modest allocations—1–2% of assets—could dramatically transform the startup ecosystem.
Corporate venture capital offers unique advantages for Zimbabwean entrepreneurs:
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Market Knowledge and Distribution: Corporates provide access to customers, networks, and supply chains that startups would otherwise struggle to reach.
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Credibility and Trust: Corporate backing signals legitimacy, helping founders overcome investor skepticism.
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Mentorship and Operational Expertise: Beyond capital, corporate partners offer technical and strategic guidance that increases the likelihood of success.
Zimbabwe is fertile ground for startups
Every year, hundreds of ventures emerge in sectors such as:
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Fintech: Expanding financial inclusion and digital payments.
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Agritech: Improving productivity and supply chains for smallholder farmers.
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Edtech: Providing innovative learning solutions amid infrastructure challenges.
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Health tech: Increasing access to quality healthcare and diagnostics.
Modern technologies, including artificial intelligence, mobile platforms, and cloud computing, ensure that Zimbabwean ventures are globally competitive. Yet without domestic investment and mentorship, these ideas often stagnate at the prototype or pilot stage.
Female founders and smallholder entrepreneurs face compounded challenges. Limited access to capital, mentorship, and networks perpetuates inequality and stifles innovation diversity. Addressing this is essential for an inclusive ecosystem that reflects the full range of talent in Zimbabwe.
Lessons from Comparative Markets
China
China leverages both international educational networks and robust domestic corporate investment. Its entrepreneurs benefit from trust signals developed abroad, but equally importantly, Chinese corporates actively fund and incubate startups. This dual approach has created a self-reinforcing ecosystem of trust, capital, and innovation.
India
India’s VC ecosystem demonstrates that domestic institutional investment, coupled with diaspora networks, can successfully complement foreign capital. Indian corporates regularly invest in startups, creating credibility, mentorship, and market access. Zimbabwe can emulate this model by establishing similar domestic corporate and institutional structures.
Strategic Recommendations for Zimbabwe
To build a sustainable, high-growth entrepreneurial ecosystem, Zimbabwe must focus on both capital availability and trust-building mechanisms. Key recommendations include:
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Expand Corporate Venture Capital:
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Encourage local corporates to allocate 1–2% of assets to startups.
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Structure programs for co-investment, mentorship, and market access.
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Strengthen Domestic Trust Signals:
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Establish accelerators and certification programs for startups.
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Showcase successful ventures to build credibility for investors.
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Enhance Policy Support:
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Offer tax incentives and risk mitigation for corporates and institutional investors.
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Simplify regulatory and bureaucratic procedures for startup funding and scaling.
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Leverage Regional Integration:
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Encourage startups to expand into SADC markets, increasing scale and market potential.
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Utilize regional funding pools and cooperative investment mechanisms.
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Promote Inclusive Growth:
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Prioritize female-led startups and ventures led by previously marginalized founders.
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Ensure funding aligns with ventures addressing critical societal needs.
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Conclusion: Trust as the Currency of African Innovation
Ultimately, venture capital is about trust, not merely financial modeling. Zimbabwean startups are capable, innovative, and globally competitive. The challenge lies in cultivating domestic trust through corporate investment, supportive institutions, and policies that encourage entrepreneurship.
By prioritizing local trust, corporate backing, and inclusive growth, Zimbabwe can unlock its entrepreneurial potential, stimulate economic growth, and position itself as a hub of innovation within Africa.
In a world where global investors are slow to trust African founders, the solution is clear: Africans must trust Africans first. Only then will Zimbabwe’s startups secure the resources, mentorship, and credibility needed to thrive on the continental and global stage.
