Perspectives from ecosystem builders and entrepreneurs navigating market entry across the continent
Expanding into new African markets holds immense potential for South African SMEs - but every successful cross-border launch demands a tough reckoning with cost, capital, and financial risk. From budgeting for localisation and navigating currency volatility to selecting the right funding model, the financial foundations of expansion are often far more complex than they first appear.
This article brings together two powerful perspectives: the investor view from SME accelerator Thinkroom, shared by Founder, Catherine Young and CEO, Lucie Fink, and the operational insight of Snapplify, an edtech business that has scaled into seven African countries and beyond, presented by COO, Mark Seabrook. Together, their experiences offer a grounded, practical look at what it truly takes to fund and sustain long-term expansion across Africa.
Start with real numbers – not just ambition
For most SMEs, the decision to enter a new African market starts with market potential. But what often follows is a misjudgement of the real costs involved.
From the accelerator’s perspective, many startups drastically underestimate their total cost of market entry. They account for major line items - like legal setup or licensing - but overlook the operational layers that determine whether their product or service is actually viable in the market. These include:
- Local staffing or partnerships, often required to meet regulatory or credibility thresholds.
- Compliance consulting to navigate tax and ownership laws.
- Sales localisation, including messaging and product adaptation.
- Currency fluctuation cushions for imported goods or cross-border transactions.
Snapplify echoed this from an operator’s perspective. The company’s expansion into countries like Kenya, Nigeria, and Zambia demanded significant upfront investment - not just in product localisation and training, but also in establishing trust with local stakeholders, including ministries of education.
"One of the most substantial costs wasn’t tech deployment - it was building capacity in the market. You can’t succeed without real engagement at the ground level."
The lesson is clear: SMEs need to start with real numbers, not just ambition. Estimating total entry costs requires a granular understanding of what the market truly demands, beyond simple regulatory compliance or infrastructure spend.
Beware the ‘hidden costs’ of scaling in low-connectivity environments
One recurring theme across both interviews was the unanticipated financial burden of infrastructure gaps. Snapplify, which offers digital learning tools, realised early on that bandwidth constraints would limit platform adoption. The solution? Design custom tools like Book Buddy that function via WhatsApp, ensuring that students could access learning even in areas with limited internet access.
"We had to engineer solutions that didn’t rely on broadband. That meant new development, testing, and ongoing support - all of which increased the cost of expansion, but were absolutely necessary."
This story reflects a broader truth: businesses entering underserved markets often need to adapt their tech stack or service model - and those adaptations carry hidden financial implications. Thinkroom’s team noted that startups who overlook this tend to burn cash trying to force-fit a solution into a context it wasn’t designed for.
For SMEs, this means allocating budget not just for initial deployment, but for sustained local support, troubleshooting, and training, especially in markets with connectivity challenges.
Localisation is a financial strategy - not just a communications one
Both organisations emphasised that localisation isn’t just about language or branding - it’s about budgeting strategically to make a product or service relevant in-market.
For Snapplify, this meant aligning their content to each country’s curriculum, securing local partnerships, and pricing in local currencies to protect schools from exchange rate shocks.
"Offering local pricing helped us eliminate a major barrier to adoption. It also reduced our exposure to foreign exchange risk - something every SME should be thinking about."
On the investor side, Thinkroom highlighted that localisation often defines success or failure in new markets, especially when it comes to sectors like fintech or edtech, where regulation and user behaviour vary widely. The startups that succeed are those that treat localisation as core to their budgeting and go-to-market planning, not an afterthought.
Moreover, localisation has strategic implications for cost management. While larger markets like Kenya or Nigeria may offer faster scaling due to developed digital infrastructure, they also demand careful alignment with regulations, curricula, and local norms. Smaller markets, such as Lesotho or Eswatini, may initially appear cheaper to enter but often require deeper investment in trust-building and ongoing engagement.
Choose the right papital for the right phase
When it comes to financing expansion, both interviews stressed that there’s no one-size-fits-all model. The “right” approach depends on the company’s size, maturity, and strategic goals.
Snapplify has leaned on blended financing models, combining public-private partnerships, multilateral funders, and commercial revenue. This has allowed them to scale across education systems while reducing upfront cost burdens for schools.
"We’ve worked with departments of education and donor-backed programs to fund rollouts. It’s a model that balances scale with social impact."
For early-stage companies, Thinkroom emphasised the growing relevance of alternative funding mechanisms, such as:
- Revenue-based financing,
- Equity-free accelerators,
- And strategic partnerships with distribution partners
Traditional venture capital is still relevant, but for African SMEs, it often comes with terms or expectations that don’t align with the regional reality.
"VC isn’t always the best fit. We help startups think beyond equity - especially when what they really need is working capital and a go-to-market partner."
Plan for risk - especially currency and trade volatility
One of the more underappreciated challenges SMEs face in African expansion is financial volatility, from fluctuating currencies to shifting trade agreements.
Snapplify has addressed this through local currency pricing, but also through careful financial modelling that anticipates currency depreciation in countries like Zambia and Uganda. Their cloud-first, mobile-optimised platforms also reduce reliance on imported hardware, which helps insulate them from tariff shocks.
The investor team pointed out that very few SMEs actually build risk buffers into their budget. Many treat pricing or operating models as static, when in reality, they need to be fluid. AGOA-related uncertainty, for instance, can significantly alter a business’s import/export strategy overnight.
Long-term resilience means financial discipline, not just growth hacking
Perhaps the most consistent theme across both interviews was the importance of sustainable financial practices over rapid growth tactics. Snapplify, for instance, took the long view - choosing to build deep roots in each market rather than expanding too quickly.
The investor echoed this: businesses that succeed across borders are those that track performance metrics beyond revenue - customer retention, local stakeholder engagement, and cost efficiency.
"The businesses that make it across multiple markets? They don’t just raise capital, they deploy it with discipline."
For South African SMEs eyeing expansion into Africa, the financial road ahead is as critical as it is complex. From budgeting for localisation to choosing fit-for-purpose funding, the path is full of strategic decisions that determine whether growth is scalable or just temporary.
What unites the stories from Snapplify and Thinkroom is a philosophy of contextual discipline: making financial decisions grounded in local reality, built for resilience, and aligned with long-term impact. Because in Africa’s fast-evolving markets, the smartest money isn’t the most aggressive - it’s the most adaptive.
This SimplyBiz article was developed in collaboration with our research partner,
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