Fintech firm Stitch in South Africa experiences partial sell-off as Rally Cap shifts focus
Rally Cap Partially Exits Investment in South African Fintech Stitch
In a significant move for Africa's startup ecosystem, venture capital firm Rally Cap has partially exited its investment in South African fintech company Stitch. This decision comes following Stitch's successful $55 million Series B funding round in April 2025.
The exact size of Rally Cap's initial investment and the financial returns from this partial exit have not been disclosed. However, this move marks an important development as it indicates early-stage investors in Africa beginning to realize liquidity through partial exits rather than waiting for traditional full exits such as Initial Public Offerings (IPOs) or acquisitions.
Stitch, which offers digital payment solutions, has been active post-Series B, making strategic acquisitions to enhance its offerings. In March 2025, it acquired ExiPay and rebranded it as "Stitch In-Person Payments". More recently, it finalized its acquisition of Efficacy Payments, securing direct card acquiring capabilities within South Africa.
The Series B round was led by investors including QED Investors, Norrsken22, Flourish Ventures, Glynn Capital, and angel investors such as Trevor Noah, signifying strong growth and confidence in Stitch.
Rally Cap, founded by Hayden Simmons in 2020, typically invests between $200,000 and $500,000 at pre-seed and seed stages. Its African portfolio includes other startups like Termii, Circadian, Precium, and Cauridor. The firm launched its first $30 million fund in 2022.
This partial exit by Rally Cap reflects a broader trend in African venture capital where early-stage VCs are finding new ways to unlock liquidity in the context of a still maturing tech exit market. Despite an increase in funding rounds, notable exits are still relatively uncommon in Africa's startup ecosystem. However, these acquisitions and returns indicate a growing emphasis on exits within the region.
The Stitch exit by Rally Cap underscores the momentum for more venture-backed wins across the region. By 2024, Rally Cap expanded its scope with a $5 million climate tech fund, demonstrating its commitment to supporting innovative startups in Africa.
[1]: [Source 1] [2]: [Source 2] [3]: [Source 3] [4]: [Source 4] [5]: [Source 5]
- As Rally Cap partially exits its investment in Stitch, the startup ecosystem in Africa is witnessing a significant shift in the financing landscape of technology companies, with early-stage investors exploring partial exits as a means of realizing liquidity.
- This move by Rally Cap, a key player in Africa's finance and technology sector, showcases the potential for profitable returns within the region, which could entice more investors to enter the startup ecosystem and foster growth in the technology sector.
