Africa’s Capital Market Plumbing Crisis: Can Technology Fix the Flow?

By Caleb Maru

Africa’s venture capital and private equity landscape appears robust on paper. Last year delivered one of the continent’s strongest fundraising performances, with funds securing over US$4 billion in commitments.

Exit activity surged 50 percent year-over-year, while approximately US$10 billion in dry powder – uninvested capital – sits ready for deployment across African funds.

These figures suggest a maturing, healthy capital market. The reality, however, tells a different story.

Africa’s fundamental problem isn’t capital scarcity – it’s liquidity paralysis. The infrastructure connecting investors to opportunities remains antiquated, fragmented, and inefficient.

Think of capital markets as a water system: investors represent the source, liquidity measures flow velocity, and infrastructure provides the pipes, valves, and taps that determine how quickly money reaches its destination.

In developed markets, this plumbing is standardized, efficient, and nearly invisible. Transactions close swiftly.

Documentation flows seamlessly. Capital moves at digital speed.

In Africa, the pipes are corroded, convoluted, and chronically clogged.

The Infrastructure Problem

The obstacles are systemic and multi-layered. Fragmented corporate legislation varies dramatically across jurisdictions.

Restrictive foreign exchange controls constrain capital movement. Company registries operate on outdated systems that would seem archaic in other regions.

Consider a practical example: repatriating funds from Nigeria to international investors during an exit requires obtaining a Certificate of Capital Importation. What should take days stretches into weeks.

Simple transactions balloon into month-long negotiations. Exits that might close in quarters elsewhere can drag on for years.

This isn’t merely inconvenient – it’s economically destructive. That $10 billion in committed but uninvested capital represents opportunity cost measured in jobs not created, businesses not scaled, and innovations not funded.

The money exists; the mechanisms to deploy it efficiently do not.

Enter Carta: Fixing Global Market Plumbing

When Henry Ward founded eShares in 2012, his vision was straightforward: digitize stock certificates. By 2017, the company had evolved into Carta, a comprehensive platform managing cap tables, valuations, investor relations, and secondary liquidity for employees.

Today, Carta dominates private market infrastructure globally, serving venture capital, private equity, private credit, and limited partner operations. The company didn’t simply create software – it fundamentally rebuilt the plumbing for private markets in the United States, then systematically expanded into Europe and Asia.

Carta’s achievement was making complexity invisible. Founders track ownership effortlessly.

Investors access real-time portfolio data. Employees convert equity into cash through functioning secondary markets.

The infrastructure receded into the background, allowing capital to flow unimpeded. Yet Africa remained disconnected from this modernized infrastructure – until recently.

Localization as Strategy

Earlier this year, Carta made a strategic move signaling serious commitment to emerging markets. Marvin H. Coleby, who has spent years building solutions for African capital markets since 2017, joined forces with Ward and Bhavik Vashi, Carta’s Managing Director for Emerging Markets, to adapt the company’s products for new geographies.

Their focus: launching a comprehensive suite of tools tailored for founders, venture capitalists, private equity firms, and private credit providers across Africa.

This represents more than geographic expansion – it’s infrastructure arbitrage. Carta is importing proven systems from mature markets and adapting them to local contexts, potentially leapfrogging decades of gradual institutional development.

The Broader Question

The critical question isn’t whether Carta’s technology works – its track record speaks clearly. The question is whether imported solutions can navigate Africa’s unique regulatory complexity, cultural business practices, and institutional fragmentation.

Optimists might argue that standardized digital infrastructure could harmonize fragmented systems, creating network effects that encourage regulatory convergence. When everyone uses the same rails, maintaining incompatible local systems becomes increasingly costly and pointless.

Skeptics might counter that decades of institutional inertia, vested interests in existing systems, and legitimate sovereignty concerns will constrain any single platform’s ability to transform markets fundamentally.

The truth likely sits between these poles. Technology can accelerate transactions, increase transparency, and reduce friction. But it cannot unilaterally reform foreign exchange policies, rewrite corporate law, or modernize government registries.

What Success Looks Like

If Carta succeeds in Africa, the benefits extend far beyond faster deal closures. Improved infrastructure would unlock that stranded US$10 billion in dry powder, accelerating deployment timelines.

Faster exits would improve fund returns, attracting more institutional capital. Standardized documentation would reduce legal costs and transaction risk. Secondary markets would give early employees and angels liquidity, strengthening startup ecosystems.

More fundamentally, efficient capital markets would shift Africa’s competitive position. When Lagos can match London’s transaction velocity, when Nairobi rivals New York’s infrastructure efficiency, African businesses compete on merit rather than structural disadvantage.

The continent’s demographic dynamism, expanding middle class, and technological adoption rates already represent compelling investment cases. Remove the infrastructure friction, and Africa’s capital markets could experience explosive growth.

The Verdict

Can Carta fix Africa’s broken liquidity pipes? Partially, perhaps – but meaningfully. No single company can solve systemic regulatory challenges or overnight transform institutional cultures.

But by providing world-class infrastructure that makes complexity manageable, Carta could catalyze a virtuous cycle: better tools attract more capital, which justifies further infrastructure investment, which attracts even more capital.

Africa’s US$10 billion in dry powder isn’t stuck because investors lack conviction. It’s stuck because the plumbing is broken.

If technology can fix even some of those leaks, capital will flow faster – and that benefits everyone.

The question isn’t whether Africa needs better infrastructure. It’s whether the continent’s fragmented markets can coalesce around standardized solutions fast enough to capture this moment of unprecedented investor interest.

Time will tell. But for now, at least someone is finally working on the pipes.

Caleb Maru is Founder and CEO of Tech Safari, Africa’s leading tech community and media company, specializing in tech innovation, market trends, and exclusive insights across the continent. Based in Nairobi, Kenya