Why Zimbabwean Startups Face Uphill Battle in Securing Funding

Zim Money
ZiG banknotes.Photographer: Cynthia R Matonhodze/Bloomberg

Since the start of 2025, only one startup from Zimbabwe, Jamboo, has successfully secured funding. This raises a critical question: why is it so difficult for Zimbabwean startups to attract the same level of investment as their counterparts in other African nations?

Several key factors contribute to this challenge, creating barriers for Zimbabwean entrepreneurs looking for global investor support.

Limited Market Size

One of the primary reasons Zimbabwean startups struggle to secure funding is the country’s small market size. With an estimated population of nearly 15 million people, Zimbabwe pales in comparison to larger African economies like Nigeria, Kenya, and South Africa. For example, South Africa’s fourth-largest mobile network, Cell C, has over 16 million subscribers—more than the entire population of Zimbabwe.

For investors, a small population translates to a limited customer base, making the market less attractive for businesses with high growth ambitions. This smaller market size often leads global investors to overlook Zimbabwe in favor of countries with more potential for scaling.

High Poverty Levels

The economic hardships faced by Zimbabweans also deter potential investors. According to Zimstat, the national statistics agency, 61% of Zimbabweans earn less than Z$100,000 per month—roughly US$13. This level of poverty means many citizens cannot afford even basic goods and services, let alone products from startups.

Even if a startup has a groundbreaking idea, its success is often hindered by the fact that the local market simply cannot afford its offerings. Investors, aware of the widespread poverty, tend to shy away from ventures in Zimbabwe due to the limited purchasing power of its population.

Currency Instability

Zimbabwe’s complicated currency history has long been a thorn in the side of businesses and investors. Once known as Africa’s breadbasket, the country has seen its currency fluctuate drastically, making economic stability a distant memory. Since gaining independence, Zimbabwe has cycled through at least five different currencies.

The most recent attempt to stabilize the economy, the introduction of the ZiG (Zimbabwe Gold), failed within six months, contributing to skyrocketing inflation. The persistent devaluation of the currency leaves investors wary, as it reduces the value of their returns, making Zimbabwe an unpredictable environment for long-term investment.

Zimbabwe’s Damaged Reputation

Zimbabwe’s global reputation also hampers investor interest. The country is notorious for its economic instability, high inflation rates, political uncertainty, and heavy taxes. On top of these issues, the nation is currently grappling with severe power shortages, with residents facing up to 20-hour power cuts daily. This energy crisis, along with the government’s history of abrupt legal and regulatory changes, makes it extremely difficult for businesses to plan for the future.

International sanctions against Zimbabwe further complicate the situation, as investors worry about legal and financial risks. This reputation makes even the most promising Zimbabwean startups a risky proposition for many global investors.

Overcoming the Odds

While these challenges are significant, securing funding for Zimbabwean startups is not impossible. However, entrepreneurs need to work harder to prove their business models can thrive despite the country’s economic obstacles. Zimbabwean startups must present a compelling case to investors, demonstrating resilience, innovation, and a clear plan for navigating the unique challenges in the local market.

Startups in Zimbabwe face an uphill battle, but with persistence, strong business strategies, and creative solutions, they can attract the investment needed to grow and succeed.

Despite the hurdles, the Zimbabwean entrepreneurial spirit is strong, and with the right approach, more startups could follow in Jamboo’s footsteps in the near future.

Source: InnovationVillage

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