Month: September 2025

Africa is a 1.4billion-person market, 20x the size of the UK and 4x the size of the US. You would be a stupid founder to sit in your corner of Africa and not explore.

So, everybody wants to go pan-African until reality smacks them. Market expansion often sounds sexy on paper. It is the kind of announcement that founders like to make with chest-thumping pride, almost the same way politicians love to declare “we are diversifying the economy.” It feels good to say, signals growth and it gets investors nodding and clapping. You can bet the press picks it up, and suddenly you are in the headlines as the next big continental play.

The moment a startup in Lagos, Nairobi, or Cape Town grows to a certain size, the itch begins. There’s this unspoken belief that to be truly successful, you must spread your wings beyond your home country. Suddenly, we all want to plant flags across the continent, to prove we are bigger than just one market.

And to be fair, some companies have actually managed to make it work. Flutterwave is everywhere and has built a name that is recognized across multiple African countries. Paystack has pulled it off as well and has done it with enough discipline that people now point to them as a benchmark. My own company, Lendsqr, has spread beyond Nigeria, working with customers in several countries. Even Chowdeck, which is much newer in the scene, just marched into Ghana and is already crushing numbers like they have been there for years. These stories are inspiring and keep the dream alive for a lot of founders who are planning their own moves.

The truth, however, is that these few success stories sit on top of a mountain of attempts that didn’t end the same way. The continent is littered with stories that don’t sound as rosy. I’ve personally watched Nigerian startups head into other countries with all the confidence in the world, only to retreat quietly when reality hit them. Some leave with public statements about “restructuring strategy” or “shifting focus,” but many just fade out and go silent, nursing their wounds in private. I’ve also seen the reverse. Companies from other African countries have tried to break into Nigeria, hoping to tap into the massive market, and they’ve ended up crashing just as badly.

One example that comes to mind is the Sendy, the Kenyan logistics company that tried their luck in Nigeria. They came in with energy and ambition, but it didn’t last. It was over before most people even noticed they had arrived. Wave, which is doing incredibly well in francophone Africa, hasn’t dared enter Nigeria, and maybe that decision is more out of wisdom than fear. Nigeria is not for children. It eats up outsiders who underestimate it, just as easily as other countries chew up Nigerian startups that come in thinking size and ambition are enough.

So when I talk about the myth of African expansion, this is what I mean. On the surface, it looks like the natural next step in a startup’s growth story. It feels like something you are supposed to do once you are stable at home. But when you look at the outcomes of many who have gone before you, what you find is that expanding across Africa is less of a walk in the park than they let on.

And before anyone runs off with the wrong idea. This is not a dig at any individual founder or business. It is my own reflection from years of watching, living, and sometimes participating in these moves. It is based on the scars I have seen others carry and the ones I have earned myself.

Why do we even want to expand in the first place?

The motivation is never the same for every company, and each founder has their own story to tell about why they chose to leave the comfort of their home market. For me, speaking from my Lendsqr journey, the decision was almost hardwired from the beginning. We never set out to build something that was only relevant to Nigeria. The company’s DNA was global from the very start.

Lending has never been a uniquely Nigerian issue, it’s always been a challenge faced in every economy where people need access to credit to move forward. Whether it’s a street vendor in Lagos, an Uber driver in Dubai, or a small migrant-owned business in Toronto, the need for fair, reliable, and efficient access to credit is the same. That understanding shaped how we built Lendsqr and made expansion feel like a natural progression rather than an afterthought.

As things stand today, we already serve customers in countries far beyond Nigeria. We have businesses using Lendsqr in Canada, the United States, Rwanda, Zambia, Malawi, and we are in meaningful conversations with potential clients in several other places as well. That was always the plan. It was never about simply conquering Lagos or focusing on a handful of Nigerian states. The mission was always to solve lending problems wherever they existed, and the more we engaged with different markets, the clearer it became that our solution could travel.

Another major driver is the need to spread risk. Putting all your eggs in one basket is never a smart move, and in a market like Nigeria, it is downright dangerous. If your entire livelihood as a business is tied to the whims of one regulator or one government agency, you are gambling with your future. I have seen this play out in real time. The FCCPC made one sweeping decision recently that threw the entire lending ecosystem in Nigeria into confusion. If Nigeria was our only market, that single move could have ended us. Unfortunately, that’s the reality of building in volatile environments. By expanding to multiple countries, we reduced that risk. It meant that if one market decided to play rough, the entire company would not go under.

There is also the financial angle, which cannot be ignored. Revenue from multiple streams is healthier than relying on a single source, and international expansion makes that possible. If there are markets willing to pay for a product you have already built and tested, it only makes sense to step into them. For us, it was about increasing top-line numbers and also about strengthening the platform itself. Working with a wide variety of customers across different geographies exposes you to different lending cultures, regulatory requirements, and customer expectations. Every time we enter a new market, the product gets better. The feedback loop becomes richer, the technology more resilient, and the overall offering sharper because it has to meet higher levels of diversity.

So when I think about why we wanted to expand, it was never a vanity project or a way to entice investors. Rather, it was rooted in the nature of the problem we were solving, the need to protect the business from unnecessary risks, the opportunity to make more money, and the understanding that the more we stretched ourselves across borders, the stronger Lendsqr would become.

Market expansion is hellishly hard

The biggest reality check for any expansion dream is often regulation. For Lendsqr, we’ve been lucky because we operate strictly as software. We don’t move money ourselves, which means we are not directly under the kind of licensing and compliance requirements that payments companies face. That has spared us many sleepless nights.

But for any company whose business model involves actually handling money, the reality is brutal. You will find yourself sitting in front of regulators who can stall you for months, sometimes even years, before you get the green light. The rules are not always clear, and just when you think you’ve ticked every box, another requirement appears. It is never a one-time battle either, be prepared for a constant tug-of-war that drains time, energy, and cash.

From my days in banking with UBA, Access, and Atlas Mara, I saw how different the game is when you are a large institution with the muscle to play. These banks had entire departments dedicated to market entry. The teams were filled with people who spent their entire careers learning how to navigate regulators across different countries. They knew the contacts to call, the processes to follow, and even the cultural nuances that mattered when walking into a government office. That kind of machinery is what gave them an edge. Startups, on the other hand, rarely have that. They move into new markets armed with gist, hearsay and a lot of optimism. And optimism is not a strategy when regulators are standing in your way.

The second wall you crash into is the cost. Expanding into another country is not just expensive; it can bleed you dry if you don’t have the right financial foundation. Banks, again, can afford to raise capital specifically for expansion. They walk into new markets with war chests and stay long enough to weather the storm until their operations stabilize. Startups don’t have that luxury. Many of them try to squeeze international expansion out of funds that were barely enough for their home market. What happens is that the burn rate goes up, revenue lags behind, and very quickly the whole project becomes unsustainable. I have seen promising companies sink this way because they underestimated how much money it would take to break into another market.

And then comes the most unpredictable challenge of all: people. Regulations and money can be calculated, at least to some degree, but people are the wildcards that make or break everything. The hires you make in a new country determine whether your business will take root or wither. Too often, founders underestimate this. They go into a new market, bring in locals, and then realize the work culture and sense of urgency are completely different. Nigerians, for instance, are known for a kind of productive madness (a fancy way of saying we dey craze). We thrive under pressure, we improvise when the ground shifts, and we move with speed even when the environment is chaotic. That edge is what helps us survive. But when you enter a market where the pace is slower, or people prefer caution and safety, and you build your team around that, the disconnect becomes dangerous. You may find that no matter how hard you push, things move at a crawl, and eventually, you drown in that sluggishness.

I witnessed this dynamic back in my UBA days. We were fortunate in countries like Ghana, Cameroon, and Uganda, where we found incredible people to build with. These were competent hires that were relentless, sharp, and willing to fight for results. They would have excelled anywhere in the world, and UBA was lucky to have them. That kind of talent is rare, though. Most startups expanding across borders do not always strike gold when hiring, and without that quality of people on the ground, even the best product and the best intentions collapse under the weight of local realities.

Why banks sometimes win where startups fail

Banks, despite all their layers of bureaucracy and the sluggish pace they’re often accused of, have one advantage that tilts the game in their favor. They don’t always walk into a new country blind or start laying bricks from the ground up. More often than not, they take the shortcut of buying into an existing business that’s already running in that market. It could be a small local bank or a mid-tier institution, but the point is that they inherit something that is already moving.

Even if the integration process is messy, full of cultural clashes, and expensive in ways that only bankers can stomach, there is already money flowing in. That immediate revenue, no matter how modest, acts like a shock absorber. It cushions the blows that come with learning a new market and keeps the business afloat long enough for them to figure out their rhythm.

Startups almost never have this kind of luxury. The reality is that we are too strapped for cash to go around acquiring companies, so the default mode is to build from zero and hope it sticks. A handful of acquisitions do happen in the startup world, but those are exceptions and not the rule. Without that initial cushion of ready-made revenue, every mistake cuts deeper and every delay is costlier. Bloodbath is exactly what happens when the burn rate collides with the slow grind of market entry. For startups, survival often comes down to how long you can keep going without oxygen, and in new markets, that is rarely long enough.

What it really takes to succeed across Africa

If anyone is serious about expanding across the continent, here’s what I’ve learned over the years, both from my banking days and now at Lendsqr.

The first thing is to know the market inside out. And I don’t mean a few reports or the stories you hear at conferences. I’m talking about the messy, often uncomfortable details that don’t make it into slide decks. You need to understand how politics shapes business in that country, what regulators actually like to deal with, the unwritten rules that determine who gets ahead, and the local players who quietly control the ecosystem. These are things you only uncover if you’re willing to dig, listen, and sometimes learn the hard way. Expansion is not a place for too much guesswork or improvisation.

Second, you need to bring in people who live and breathe regulation. If your business touches money in any way, you cannot afford to wing it. Regulators have no sympathy for startup ambition, and they will not bend the rules because you have a great pitch deck or you’re coming to solve a “problem”. This means hiring the right experts, even when they don’t come cheap. The truth is that these are the people who can keep your business alive when a new law drops or when the regulator decides to make an example of someone. Paying for that knowledge upfront is a lot better than paying in lost revenue and endless delays later.

Third, you have to be ruthless about the people you hire. Expansion is not the time to surround yourself with people who just like the idea of working with the next “big startup”. You need people who are hungry, who can operate in chaos, and who have the stamina to build something from scratch without constant handholding. These are the kinds of hires who will stay focused when things get ugly and who won’t buckle under the pressure of setbacks. Without them, the whole thing collapses before it even takes root.

Finally, you need to send in people who already understand your culture at the core. Back in banking, the playbook was clear: the first person deployed into a new country was almost always Nigerian. The reason was simple. They carried the DNA of the parent company. They understood how decisions were made at headquarters, they could replicate that culture in a new environment, and they acted as a bridge between home and the new market. If you parachute in someone who has no sense of your company’s way of working, no matter how competent they look on paper, you’ll struggle to translate your mission into reality. Culture is fragile, and expansion has a way of breaking it if you don’t guard it carefully.

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So, is African expansion really a myth?

Looking at the stories around us, the evidence leans heavily in that direction. For every Flutterwave, Paystack, or Cellulant that manages to pull off multi-country expansion and make it look effortless, there are dozens of startups that attempted the same thing and quietly disappeared after burning money and energy. The failures don’t get panel discussions or press releases, but if you’ve been in the ecosystem long enough, you’ve seen them. Some shut down entire operations, others limp back to their home markets, and a few keep hanging on in silence, never quite breaking through.

The dream of spreading across Africa carries a certain romantic appeal. It feels like destiny to be the company that unites fragmented markets under one product, to prove that borders don’t matter, and to boast about operations in half a dozen countries. But the ground you’re walking on is unpredictable and often hostile. It takes deep capital, endless resilience, and a team that can withstand constant turmoil. Without those, expansion is less of a growth story and more of a slow-motion collapse.

It can be done, but the bar is much higher than founders like to admit. The continent doesn’t reward undercapitalized businesses that expand just because. If you’re not ready to spend heavily on regulation, local talent, infrastructure, and the inevitable mistakes that come with learning new markets, you’ll be finished before you even make it to stability. The idea that “Africa is one big market” sounds nice in pitch decks, but in practice it’s an illusion. Every border comes with its own politics, rules, and players, and pretending otherwise is the fastest way to ruin.