Court Temporarily Dissolves 54 South African Groups Amidst Mastercard Foundation Controversy
African Venture Capital Firm 54 Collective Under Provisional Liquidation
The South African High Court has provisionally liquidated venture firm 54 Collective (formerly Africa Founders Ventures) due to allegations of financial misconduct tied to a $106.5 million grant from the Mastercard Foundation.
The court's ruling follows evidence of serious financial irregularities, including misuse of funds, backdated accounting entries, and unauthorized transfers amounting to millions of dollars. The firm's attempt to undergo business rescue was rejected as legally invalid, and multiple bank accounts have been frozen.
The Mastercard Foundation terminated its partnership after forensic audits revealed financial mismanagement between 2023 and 2024. The scandal led to the disbanding of 54 Collective's teams and caused losses to startups they supported, shaking investor confidence in African venture capital.
The court has appointed an independent liquidator to handle the affairs of 54 Collective. Auditor PwC cited poor financial controls and lack of expertise as reasons for their inability to audit the firm's financial statements for 2023 and 2024. Deloitte uncovered a $4.59 million transfer from Africa Founders Ventures to Founders Factory Africa, a for-profit entity reportedly run by the same individuals behind Africa Founders Ventures.
The firm's business rescue practitioner, Barry Urban, has been ordered to personally pay the foundation's legal fees for mishandling the case. A final decision on the permanent liquidation of 54 Collective is expected on August 11, 2025.
The case has sparked debate across Africa's philanthropic and venture circles over accountability and governance in nonprofit funding, emphasizing the need for transparent governance in venture capital using philanthropic funds. The crisis serves as a cautionary example for all parties involved.
- The financial mismanagement at 54 Collective, a former African Venture Capital Firm, has raised concerns about the transparency and accountability in the industry, particularly in relation to philanthropic funding of businesses.
- The scandal surrounding 54 Collective, under provisional liquidation due to alleged financial misconduct, has caused losses to startups in the African business sector, eroding investor confidence in the African venture capital finance sector.
