Beyond Funding: What Innovators Really Need from Innovation Agencies
Ask any policymaker what innovators need most, and chances are the answer will be funding. It is a reasonable assumption. Without capital, promising ideas stall, prototypes gather dust, and talented founders move on to salaried jobs. This logic has shaped how innovation agencies across Africa and beyond have structured their programmes, measured their success, and justified their budgets.
But what if this assumption is only partially correct? What if funding, while necessary, is not the primary reason innovations succeed or fail?
The data suggests exactly that. CB Insights examined over 100 startup post-mortems to understand why ventures collapse. The findings are striking: 42% cited lack of market need as a primary cause of failure, making it the single most common reason. Running out of cash came second at 29%. Other major factors included being outcompeted (19%) and struggling with pricing and cost structures (18%). In other words, more startups fail because they cannot find customers than because they cannot find capital.
This pattern holds across sectors and regions. A 2025 study by the Hare Strategy Group analysed over 400 fintech ventures and found that 73% failed primarily due to regulatory challenges, not technical or financial shortcomings. Even more telling, startups with regulatory expertise on their founding teams secured funding 2.8 times faster than those without. The ability to navigate rules mattered more than the ability to raise money.
The African Context
For African innovators, these challenges take on particular dimensions. Research from the World Bank indicates that over 90% of African startups struggle to secure external funding, relying instead on informal lending or personal savings. But the obstacles extend beyond capital scarcity. Unreliable electricity, limited internet access, fragmented markets across 54 national jurisdictions, and inconsistent regulatory environments all create barriers that money alone cannot overcome.
Consider a health technology startup in Nairobi with a working prototype and seed funding. To scale across the continent, that company must navigate different health regulations in each target country, build distribution partnerships from scratch, adapt its product to varied infrastructure conditions, and compete for attention in markets where it has no presence or reputation. Funding helps with all of this, but it does not solve any of it directly.
What Leading Agencies Are Doing Differently
Recognition of these realities is driving a quiet transformation in how innovation agencies operate. The OECD's research on startup support now emphasises that effective innovation ecosystems require a broader mix of services, including incubation, acceleration, and what they call "business development services": non-financial supports focused on advice, mentorship, and management training.
Three areas of non-financial support are proving particularly valuable.
Market access facilitation. Many technically strong innovations fail because their developers simply cannot reach customers. Agencies are responding by acting as connectors, linking startups with corporate partners, government procurement opportunities, and pathways into new markets. South Africa's Technology Innovation Agency has developed programmes specifically designed to support innovators beyond funding, helping technologies progress toward market entry and commercialisation. The shift reflects a basic insight: a product without a route to market is not really a product at all.
Regulatory navigation. Regulatory sandboxes have emerged as one of the most significant innovations in agency practice. These controlled environments allow innovators to test products under supervision without incurring full compliance burdens. The UK Financial Conduct Authority pioneered this approach, and similar programmes now operate in Singapore, the UAE, Malaysia, and an increasing number of emerging markets. For startups, sandboxes reduce time to market and lower initial barriers. For regulators, they provide insight into new technologies before they become widespread. Both sides benefit from the collaboration.
Mentorship and capability building. A Deloitte survey found that 94% of entrepreneurs with mentors felt their advisors provided genuinely impactful guidance. Yet quality mentorship remains underutilised in many ecosystems because it requires sustained commitment from both parties. Agencies are working to formalise these relationships, connecting innovators with industry veterans, successful founders, and technical specialists who have navigated the challenges they now face. This kind of support cannot be bought, but it can be facilitated.
The Case for Continental Collaboration
Individual agencies can do much to expand their support models. But some challenges are simply too large for any single national institution to address alone. Market fragmentation across Africa means that even a well-funded startup in one country faces significant barriers when trying to expand regionally. Regulatory frameworks differ. Business cultures vary. Networks that might connect a Kenyan innovator with South African distribution channels or Nigerian customer bases remain underdeveloped.
This is where collaboration between innovation agencies becomes essential. By sharing knowledge about what support models work, harmonising approaches to common regulatory challenges, and creating pathways for cross-border partnerships, networks of agencies can address systemic barriers that no single institution could tackle in isolation. Initiatives like the Investing in Innovation (i3) programme, which operates across 21 African countries combining grants with commercialisation support and market access facilitation, demonstrate what becomes possible when agencies work together.
Rethinking Success
If agencies are serious about moving beyond funding as their primary intervention, they will need to rethink how they measure success. Traditional metrics such as capital deployed, companies funded, and equity returns capture only part of the picture. More meaningful frameworks might track market access outcomes, regulatory approvals facilitated, mentorship relationships formed, and cross-border partnerships enabled.
None of this diminishes the importance of funding. Capital remains essential, and Africa's innovation financing gap is real. But the evidence increasingly suggests that funding works best when deployed alongside robust non-financial support. Agencies that understand this, and structure their programmes accordingly, will be better positioned to help innovations not just survive but actually scale.
The question for innovation agencies today is no longer simply how much capital they can deploy. It is whether they are building the comprehensive ecosystems that innovators actually need to succeed.