Venture Capital firms rarely shut down in Africa, especially not firms as prominent as 54 Collective. Before the venture studio shuttered in February 2025, only Naspers Foundry, once South Africa’s largest VC fund, had closed after its parent company pulled funding.
When news broke that 54 Collective was winding down, the industry was stunned—and full of questions. In recent days, court documents have begun to provide answers.
At the centre of the collapse is a $700,000 rebranding exercise that Mastercard Foundation, the studio’s biggest backer, says it never approved. The Foundation’s grant agreement, which began in 2023, committed $106.5 million over five years to fund 54 Collective under strict rules that all spending be for non-profit purposes.
The rebrand, which blurred the lines between Africa Founders Ventures (AFV) and its affiliated for-profit entities, Founders Factory Africa and Utopia Capital, triggered alarms at Mastercard Foundation. Not only was the expenditure deemed non-compliant, but it raised concerns that the grant funding was potentially bolstering commercial brands.
Bongani Sithole, 54 Collective’s former CEO, told that the rebrand was approved by the Foundation and denied any wrongdoing.Â
But court filings contradict that account. According to the filings, the rebranding set off a chain of scrutiny that ultimately led to a forensic audit by Deloitte.
The audit uncovered a disturbing picture: no audited financials for 2023 or 2024, over 2,000 backdated journal entries that skewed the firm’s income reporting, and a $4.59 million transfer from AFV’s Standard Bank account to one controlled by Founders Factory Africa.
Following these findings, Mastercard Foundation issued a 90-day termination notice, demanded a return of its funds, and eventually took legal action to freeze AFV’s accounts. By May 2025, the Foundation had filed for the studio’s wind-up in court, officially bringing one of Africa’s most active investors to a halt.
The consequences for Africa’s tech ecosystem are far-reaching. Dozens of early-stage startups have lost a key source of funding and mentorship. Employees were laid off without guaranteed severance. And the collapse of 54 Collective—once the continent’s busiest investor—has left a hole in the already fragile venture landscape.
