In February 2025, over 40 employees at 54 Collective, an early-stage venture studio that helped African founders build their startups, received shocking news. Their firm was shutting down, and they were being laid off. At the time, it was almost unheard of for an African venture firm to lay off employees and shut down, but when Mastercard Foundation pulled its funding, the capital to support the venture studio dried up.
It was not only bad news for employees at 54 Collective, officially registered as Africa Founders Ventures (AFV), but also for Africa’s tech ecosystem: the venture studio planned to fund 105 startups over the next five years and had invested in 41 startups. It was Africa’s most active investor in 2024, and its abrupt shutdown raised fresh questions about the sustainability of donor-backed venture models.
But, court documents seen by show that Mastercard Foundation—which also backs venture capital firms like VestedWorld, Aruwa Capital Management, and Chui Ventures—pulled its funding because of 54 Collective’s rebranding from Founder’s Factory Africa in August 2024.
“The branding was provisioned in the Grant Agreement, and the budget was approved and monitored. The Grant Agreement was not terminated due to a breach,” Bongani Sithole, the former CEO of AFV, told , denying claims of wrongdoing.
“The rebrand to 54 Collective was aimed at emphasising the new blended-finance approach of the program and to underline the pan-African identity of the program, which was targeting technology startups, SMEs, and training young people. We are devastated by the consequences this has had on our team, employees, and on the broader entrepreneurial ecosystem across the continent,” he added.
What the court documents say
In January 2023, Mastercard Foundation committed $106.5 million to fund Africa Founders Ventures (AFV)—a South Africa-based nonprofit affiliated with 54 Collective—over five years for tightly defined charitable activities. The first tranche, $19 million, was disbursed later that year into AFV-held accounts across several South African banks.
The first signs of strain emerged on July 22, 2024, when Mastercard Foundation raised concerns about AFV’s unapproved rebrand to “54 Collective.” The Foundation worried the move might blur lines between AFV and its for-profit affiliates, Founders Factory Africa (FFA) and Utopia Capital.
Three of AFV’s key executives—Sithole, Roo Rogers, and Alina Truhina—work as partners at Utopia, heightening concerns about potential conflicts of interest.
By August 7, 2024, the foundation formally withheld consent for the rebrand, citing risks of grant funds being used to benefit commercial entities. On October 1, 2024, AFV acknowledged the misstep and floated the idea of appointing a compliance officer.
Between November 2024 and February 2025, Deloitte, acting as Mastercard Foundation’s auditor, conducted a forensic review of AFV’s financials via access to its accounting platform, Xero. The early findings were troubling: AFV had no audited financial statements for 2023 or 2024, over 2,000 backdated journal entries distorted the true grant-income picture, and $4.59 million had been transferred from AFV’s Standard Bank account to one controlled by FFA. At the time, $6.17 million remained spread across accounts at Investec, Standard Bank, and Nedbank.
On January 30, 2025, Mastercard Foundation issued a 90-day notice to terminate the grant agreement. It demanded a detailed asset list, full financial disclosure, and a refund of $689,931.46 spent on the rebrand. AFV initially agreed to repay the funds on February 17, only to reverse course days later, calling immediate repayment “reckless trading.”
By March 20, with tensions rising, Mastercard Foundation’s Canadian legal counsel ordered AFV to cease interfering with records and reinstate Deloitte’s access after AFV had abruptly revoked it. Days later, on March 26, AFV’s board opted to enter business rescue—South Africa’s version of bankruptcy protection—and filed the resolution on March 27. A rescue practitioner, Barry Urban, was appointed on March 31. However, Mastercard Foundation was only notified on April 9, well beyond the five-day window required by law.
In a subsequent meeting, Urban informed the foundation’s lawyers that the firm intended to wind down AFV, not to restructure or rescue it. As part of the wind-down, AFV earmarked $3.2 million of the foundation’s funds to cover employee severance, salaries, property fees, and debts—plus Urban’s fees.
But $1 million of the requested winddown fees could not be adequately accounted for by Urban. The foundation quickly requested a halt to the rescue process and a commitment not to spend any more funds. Urban refused.
When the 90-day notice period lapsed on April 30, the grant agreement formally terminated, but AFV retained control of the funds. Mastercard Foundation asked AFV’s three banks to freeze the accounts, but under South African law, a court order was required. That request was filed on May 3. Five days later, Urban issued a notice “suspending” all obligations under the now-expired grant—a move the court later described as legally invalid.
On May 14, Mastercard Foundation filed an urgent court application to set aside the business rescue proceedings, freeze AFV’s assets, and begin winding down the organisation. That filing triggered the formal shutdown of 54 Collective. The firm’s former employees were laid off without severance packages.
What this means for Africa’s tech ecosystem
While the matter is still in court with a final decision expected at a hearing set for August 11, the venture’s shutdown and laying off of staff already have serious implications for African tech.
Even before 54 Collective’s shutdown, tech funding across Africa fell by 7% in 2024. The large size of the fund made it one of the few growth funds in Africa with the ability to back multiple startups with significant funding. Its sudden disappearance further limits the capital available for African startups and introduces new challenges for its portfolio companies.
For the firm’s portfolio companies, a significant source of funding and support was abruptly cut off as 54 Collective not only provided capital but also helped early-stage founders build their businesses. While those companies will continue to operate under the leadership of their respective executives, the gap left by 54 Collective is sizable.
The court dispute also highlights corporate governance failures and misuse of funds, which have plagued Africa’s tech ecosystem but were initially limited to startups. 54 Collective’s legal issues also show that with limited oversight, large grants can be prone to structural risks. While the decision is pending in court, future grants would likely include tighter earmarking, auditing, and accountability.
Mark your calendars! Moonshot by is back in Lagos on October 15–16! Join Africa’s top founders, creatives & tech leaders for 2 days of keynotes, mixers & future-forward ideas. Early bird tickets now 20% off—don’t snooze! moonshot..com
