Africa’s Venture Capital Firm 54 Collective Faces Liquidation Amid Mastercard Grant Mismanagement Scandal

54 Collective, a venture capital company which aimed to revolutionize investments and to evolve ideas in companies at the start of the same Africa, is currently at the forefront of collapse following poor quality allegations of more than $ 42 million in Mastercard.

This began as a non -profit initiative to finance African startups has turned into a complete financial scandal involving unauthorized transfers, an unsuccessful brand change and thousands of questionable accounting candidates.

Initially established to catalyze the growth of startups in Africa, the company is accused of having released $ 4.59 million to its for -profit affiliate, Founders Factory Africa, and spending nearly $ 700,000 for a brand change without the approval of Mastercard.

Remember that in August 2024, the firm announced its brand change in 54 collectives from Founders Factory Africa, promising a more daring mission to support technological companies through Africa via catalytic capital and adapted operational support via its venture capital success platform. This new model offered startups between $ 100,000 and $ 250,000 in equity investments and $ 100,000 to $ 150,000 in non -dilutive financing.

However, the problems started when Mastercard Foundation began asking questions about brand change and the use of funds. The company’s accounting books were suddenly flooded with more than 2,000 “adjusted newspaper entries”, none of which has been supported by verified financial statements. According to Condia, the incomplete documentation prompted the foundation to order the Deloitte accounting audit firm, in December 2024 for a forensic audit. What they found was alarming, generalized financial irregularities.

In a letter, Daniel Hailu, executive director of impact, research and learning at the Mastercard Foundation, raised red flags on “Potential for -profit activity associated with the brand linked to charitable programsAnd the apparent transfer of good will to non -charitable entities. The Foundation also launched an internal investigation into AFV transactions.

In February 2025, more than 40 employees of the collective 54 were struck by the news of a corporate closure. This occurs after the Mastercard Foundation put an end to its partnership with the VC, as well as to withdraw its funding, causing a financial collapse which struck the venture capital studio, the accelerator of the general and the entrepreneur Academy, all the programs formerly fueled by the subsidy now disappeared.

The court documents examined by Techcabal confirm that Mastercard’s decision was directly linked to the change of brand of the collective 54 in August 2024. Despite the refusals of the reprehensible act of the Sithole CEO and affirms that the agreement was not terminated due to a violation, the damage has already been caused.

In a desperate decision, the company has attempted to undergo “commercial rescue”, asking the court for $ 1.2 million to cover staff wages and $ 500,000 for office closings. But a high South African court was not convinced, calling for the “legally invalid” rescue plan and pointing out a “blatant contempt for the law”.

The court has since rendered a provisional liquidation order and frozen on a dozen bank accounts held by the collective 54 of Nedbank, Standard Bank and Investc – citing the concerns of inappropriate funds. The final liquidation hearing is scheduled for August 11, but all the panels indicate a permanent closure.

Launched in 2018, 54 collective had invested in more than 55 technological startups across the continent, including well -known names like Renda, Welahealth and Lipa later. His venture capital success platform was praised once as a game changer, providing support for personalized capitalization through a team of experienced experts.

Now, with its reputation in ruin and a subsidy of $ 106.5 million on examination, 54 collective becomes a edifying history in the landscape of African venture capital, a brutal reminder that ambition without responsibility can disentangle even the most promising missions.