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Bridging the Investment Gap: How African Fashion Can Attract Capital and Scale



African fashion is a multi-billion-dollar industry with a rich cultural and creative legacy, yet it accounts for only 1.2% of the global fashion industry according to African Business. Despite its immense potential, African Fashion struggles to secure the level of investment seen in booming sectors like fintech, mining, and infrastructure.


This lack of investment is not due to a shortage of creativity or innovation. Over the past decade, we’ve seen African designers like Thebe Magugu and Lukhanyo Mdingi recognised as finalists in the prestigious LVMH Prize, alongside major collaborations between European luxury brands and African creatives. However, funding remains a critical challenge. There is a serious lack of capital directed towards the production, manufacturing, and textile sectors, which are essential to building a self-sustaining fashion economy. Nigeria, once a significant cotton exporter, has seen its industry decline due to neglect and lack of investment. This raises pressing concerns about the future of African fashion. Talent alone is not enough. Without financial infrastructure and capital allocation, the industry cannot reach its full potential.



I had the opportunity to speak with two key figures in African investment and fashion. Tendai Shamu is an angel investor and Managing Director of First Serve Ventures, which invests in fintech, logistics, energy, and data infrastructure. While he does not specialize in fashion, his insights provided a crucial perspective on how African investors think; their priorities, risk appetites, and visions for the continent. Frederica Brooksworth is the founder of the recently established (January 2025) African Fashion Development Initiative (AFDI), an organization dedicated to providing micro-grants and mentorship to emerging African fashion entrepreneurs.



Shamu highlighted a crucial point: “You rarely see VCs investing in traditional fashion unless there is a significant technological component involved.” His statement underscores a fundamental reality: venture capital is tech-driven. According to the Partech 2024 African VC report, $3.2 billion was invested by VCs in Africa last year in 2024, and nearly half of that went to fintech. During the African VC and Startup Preview, founder of Maasai, Segun Cole, discussed that one of the next sectors expected to attract major investment is e-commerce, which is directly relevant to fashion, alongside supply chain optimization and sustainability tech.

To attract VC interest, African fashion must integrate innovation, whether through AI-driven personalisation, blockchain-enabled supply chain transparency (which would aid in ensuring that every step of a garment's journey can be permanently recorded and verified without the possibility of tampering), or sustainable material sciences. Traditional brick-and-mortar brands will struggle to fit the VC model, but fashion-tech startups that optimize production, distribution, or consumer experiences have a far better chance of securing capital.



Frederica Brooksworth, through AFDI, takes a more practical approach to solving the capital gap. With her many years working as a fashion academic, being the founder of Council for International African Fashion Education (CIAFE), she emphasizes that investment alone is not enough. “It’s not just about giving people money. They need to be taught how to use it responsibly.” AFDI’s micro-grant system, offering $500 per quarter, serves as a pre-seed investment, allowing designers to prove their ability to operate efficiently before seeking larger funding from angel investors or VCs. 

Andela founder, Iyinoluwa Aboyeji, stated in the Preview mentioned above that it is essential now more than ever for businesses to prove their ability to be capital efficient and profitable. This is critical because the investment landscape has shifted. The days of VC money pouring in effortlessly are over. Investors now demand capital efficiency. They want to see strong unit economics, early profitability, and sustainable growth models before committing funds. AFDI’s model ensures that designers develop financial discipline, making them more attractive to institutional investors in the long run.


To understand why most African fashion brands struggle to attract VC funding, we need to clarify what VCs prioritise. Generally, they look for rapid scalability, high margins, and exponential growth. These are characteristics most associated with tech startups, not fashion brands. Fashion businesses often grow as SMEs (Small and Medium Enterprises), requiring years to scale sustainably, while tech startups can achieve exponential growth with relatively little capital input.


Shamu pointed out another key issue. “Fashion is capital-intensive, requiring significant upfront investment in production, logistics, and marketing before becoming profitable.” Without a strong tech component, convincing institutional investors to take that risk is difficult.



While global fashion competitions such as the LVMH Prize, CFDA/Vogue Fashion Fund, and Woolmark Prize offer financial support, these awards primarily benefit designers with existing international visibility. Many African brands lack the resources and production infrastructure to compete at this level. It is also important to note the shortfalls of such opportunities. Lagos Space Programme founder Adeju Thompson opened up about life after winning the 2023 Woolmark prize. Following their withdrawal from Paris Fashion Week, Thompson expressed that even substantial awards struggle to address the fundamental challenges of maintaining consistent production standards and managing relationships with international buyers while operating from markets with limited infrastructure. This further highlights the need for local investment solutions tailored to African brands.



Brooksworth agrees that e-commerce presents a promising investment opportunity for African fashion. Platforms like Afrikrea, Jumia, and Shopify have allowed African designers to reach global markets. However, she highlights a major bottleneck. “E-commerce is definitely a big thing, but the problem is logistics, delivering clothing to people is an issue.” Without investment in warehousing, delivery networks, and supply chain optimisation, even the most successful fashion brands will struggle to scale. Additionally, oil and gas revenue fluctuations have significantly impacted  African currencies, creating a ripple effect throughout fashion supply chains and influencing production costs for local designers. Brands with domestically sourced materials may demonstrate greater resilience to investors as these companies weather currency volatility tied to commodity markets. Understanding this relationship between resource economics and currency stability provides crucial insight for identifying fashion ventures with sustainable growth potential across the continent.


For African fashion to attract serious investment, it must focus on three key pillars: technology integration, capital efficiency, and institutional support. Venture capital favors high-growth, scalable businesses, making AI-driven personalization, blockchain for supply chain transparency, and sustainable material innovation essential for fashion-tech startups looking to secure funding. Without a strong tech component, fashion brands struggle to fit the VC model, limiting their access to large-scale investment.


Beyond technology, capital efficiency is key. Brooksworth’s micro-grant model offers early-stage designers the chance to prove their ability to operate efficiently with minimal funding. Investors today prioritise brands that show strong unit economics and early profitability, and one of the fastest ways to achieve this is by targeting Africa’s underserved market for everyday fashion. Brooksworth pointed out that while the continent has no shortage of avant-garde designers, most local brands are absent from the basics and essentials market, leaving international fast fashion retailers like Shein, Zara, and H&M to dominate. African designers who focus on affordability and accessibility will be far better positioned to scale quickly and attract investment.





Bridging the investment gap in African fashion requires a strategic pivot toward business models that demonstrate both market relevance and financial sustainability. While many African brands are known for cultural authenticity, balancing that with commercial viability will position new and existing brands to be increasingly attractive to consumers trapped within fast-fashion consumption. By addressing the continent's underserved basic wear market with locally-designed, affordably-priced essentials, African fashion entrepreneurs can capture significant market share from international fast fashion giants while building scalable businesses. This approach not only satisfies immediate consumer needs but also creates a foundation for sustainable growth, allowing brands to establish the operational track record and revenue metrics that investors demand. The opportunity extends beyond individual success stories but in the future; a network of profitable, locally-owned fashion enterprises could establish regional supply chains, generate employment, and ultimately repatriate billions in consumer spending that currently leaves the continent. For investors, this represents an entry point into Africa's rapidly growing consumer market. For designers, it offers a path to scaling impact while preserving creative vision. And for the continent, it promises to transform fashion from a net import to a significant driver of economic development.


Institutional support is just as crucial. South Africa provides a clear example of the failure to create a supportive environment for local fashion businesses. The government has recognised the overwhelming dominance of Shein in the market but instead of investing in infrastructure and funding programs for local brands, its response has been to introduce high customs duties on imported fast fashion in an attempt to dis-incentivise consumers. While this approach might slow the flood of international competition, it does little to strengthen the local industry or position South African brands as viable alternatives. The lack of manufacturing and logistics support has already forced globally recognised designers like Thebe Magugu to move part of his production to Madagascar and Italy, a decision that reflects the state of local production capabilities. Without government-backed investment in textile production, warehousing, and export infrastructure, African designers will continue to struggle with costs, supply chain inefficiencies, and global competitiveness.


The future of African fashion depends on how well the industry adapts to investment realities. The key is not just creativity, but strategy that involves the circularity of its economy. By focusing on technology, capital efficiency, and institutional backing, African fashion can become a viable investment category rather than an overlooked creative industry. Fashion in Africa has the talent, heritage, and potential. What it needs now is the right investment structures to scale and thrive.





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