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African Tech Scene Rakes in $2.9 Billion, Nigerian Startups Dominate

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The technology space is growing to become a very necessary one, with the existence of the pandemic and with the rate at which the world is advancing. This is reflected in the revenue gathered, as tech startups in Africa alone made well over $2.9 billion in 2021.

Of the total income brought in by African tech startups, startups owned and managed by Nigerians brought in the most, with a whopping $1.7 billion (amounting to about 60%) of the total amount coming from Nigerian startups which are creating new products, services and platforms.

Africa is giving a very good account of itself in the tech scene, as a recent report by Maxime Bayen’s – a venture capitalist and business consultant – business database Africa report stated that Africa is currently home to seven different tech heavyweights, referred to as unicorns which boats of valuations surpassing $1 billion.

The United States of America has noticed the blossoming tech scene in Nigeria and is now starting to provide support for the fast-growing, lucrative sector. The United States Ambassador to Nigeria, Mary Berth Leonard at the 2021 Nigeria Tech Summit announced the intention of the US government to provide sufficient support for the tech scene in Nigeria.

The support to be provided from the United States will ensure that the country’s tech scene continues to grow and provide a favourable environment that will boost a sector which will kickstart more global businesses, create more job opportunities and ensure that the citizens live a more prosperous life.

Of the seven African tech “unicorns”, three are owned by Nigerians. These three are Opay, Flutterwave and Interswitch. Mary Berth Leonard lauded the fact that Nigeria owns three of Africa’s seven heavyweights, and went on to say that Nigeria has the potential to do a lot more in the tech scene but only with the proper support.

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Nearly 70% Forecast the Value of Start-ups in Africa Will More Than Double in Five Years

African business leaders are predicting a boom in start-up businesses across the continent as the number of working-age people launching new firms expands,  new research for blockchain-based mobile network operator World Mobile shows.

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African business leaders are predicting a boom in start-up businesses across the continent as the number of working-age people launching new firms expands,  new research for blockchain-based mobile network operator World Mobile shows.

Start-ups across the continent are currently valued at around $7.6 billion – around 0.2% of the total $3.8 trillion value of start-ups globally** – but nearly seven out of 10 (69%) of senior African business executives believe that will more than double in the next five years.

The rise in the predicted value of start-ups will be driven by growth in the numbers of people starting companies, the study with African business leaders from companies with combined annual revenues of more than $6.75 billion found.

Before the pandemic around 22% of working age adults on the African continent started new businesses***. But the research among senior executives based in Angola, Botswana, Cameroon, Ethiopia, Ghana, Nigeria, South Africa, and Tanzania found they expect that number to grow.

More than two out of five (43%) business leaders believe around a quarter of working age adults will have started their own businesses within five years. Almost all (97%) questioned expect the rate to increase from the pre-pandemic 22%.

Business leaders worry new business creation could be blocked by cumbersome regulations and a lack of digital skills due to poor internet connectivity seen as the biggest issues ahead of limited funding and fragmented markets.

They are hopeful about improvements – 70% expect the regulatory issue to become less of a problem over five years while 60% believe the digital skills gap on the continent will close.

World Mobile is aiming to revolutionise internet connectivity in sub-Saharan Africa which is essential to improving digital skills.  It is already working with the government in Zanzibar where it is launching a unique hybrid mobile network delivering connectivity supported by low altitude platform balloons.

Its blockchain-based network vastly reduces capital expenditure and cuts prices compared to traditional telecom operators and World Mobile is in discussions to expand in Tanzania and Kenya, as well as other territories underserviced by traditional mobile operators.

Micky Watkins, CEO of World Mobile said: “The numbers of Africans starting their own businesses pre-pandemic was already very impressive and it is interesting to see that senior business leaders across the continent expect even more expansion.

“More than doubling the value of start-ups on the continent over the next five years will have a major impact on employment and standards of living and governments are working hard to make this happen by removing regulation and addressing the digital skills gap.

“We are focused on providing affordable and reliable internet connectivity and in addition we are going to work with governments to support projects such as providing free, unlimited internet access to schools across Zanzibar.”

World Mobile’s balloons will be the first to officially launch in Africa for commercial use, offering a more cost-effective way to provide digital connection to people and is the first step in its mission to help bring nearly four billion people online before 2030 in line with the UN and World Bank’s SDGs.

The World Mobile approach is more sustainable, in environmental, social and governance terms. Environmental impacts are mitigated using solar-powered nodes, second-life batteries, and energy-efficient technology. World Mobile creates a positive societal impact through the application of its circular economy model – a “sharing economy” where locals share in the ownership and rewards of the network.

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Transport start-ups: A growing Industry in Sub-Saharan Africa

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ABC Transport Plc

A wave of innovative transport start-ups is helping to keep Africa’s heartbeat sector growing. In the past year, the transportation sector achieved an impressive record of 21 start-up companies, the majority of which were aimed at unlocking new growth opportunities through software, internet-enabled solutions, and alternative e-mobility solutions.

With roads being the arteries through which the African economy pulses, the ongoing challenges have been key hindrances to sustainable economic growth and global competitiveness and trade. However, the spark of positive change being driven by recent start-ups in markets like Nigeria, South Africa, and Kenya has the potential to continue being driven by global trends/shifts but will require the continued support of innovators by both the private and public sectors.

Furthermore, this startup wave is one step closer to achieving the estimated jump of $16 billion in intra-regional trade that economists and trade experts expect to be possible through the African Continental Free Trade Agreement (ACFTA).

Though plagued with several challenges, including an infrastructure investment shortfall of US$67 billion and US$107 billion annually, according to the IFC, ​ a look at recent start-ups and their funding avenues in Africa points to a growing attraction of the continent as the last growth frontier for investors. ​

In 2021 alone, the continent attracted about 564 start-ups (Figure 1), with fintech accounting for the majority share. For transport start-ups specifically, the records show a proactiveness by innovators to help solve Africa’s connectivity predicament, ​ where supply chain challenges and limitations in physical infrastructure network limitations amount to about 40-60% surcharge costs on goods on the continent.

The record of companies included in Figure 1 also points to an industry gearing up for global trends that are likely to leave lasting changes in the industry. These trends as recognised by the Association of African Exhibition Organisers (AAXO) were likely noted to be around technology and automation and Environment Social Governance (ESG). In the African context, these have already been adopted and are surfacing through a rise in the e-logistics and e-mobility sectors.

2022 is expected to follow the growth trajectory seen in 2021, through several ongoing joint efforts to support innovators. Among these are incubation and accelerator platforms like the Baobab Network (which raised funding worth $200 million in just eight months); private sector participation like Toyota’s Mobility 54 venture unit and several more new financing options offered to solutions targeted at reaching the untapped markets in Africa, particularly in the key markets highlighted in Figure 2. South Africa saw an impressive 7 start-ups in 2021, with the ‘WhereisMyTransport’ company raising about US$14.5 million. ​

With Africa’s population expected to nearly double by 2050 (to 2.5 billion), achieving efficiency in the connectivity of goods and people will be critical, which begs the importance of supporting current business avenues that are proving to work well. The transport start-up industry is evidently one of them, particularly in Nigeria, South Africa and Kenya, and the North African countries.

Moreover, with the ongoing challenges around fuel hikes, and disruptions caused by the Russia-Ukraine conflict, African nations have a keen opportunity to strengthen their networks through forward-thinking solutions, but also to leverage the potential of the AfCFTA through collaboration.

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African Tech-start Up Funding Will Double by 2025

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African business leaders are forecasting a surge in spending on tech start-ups as foreign direct investment and improved internet connectivity helps establish the continent as a tech superpower,  new research for blockchain-based mobile network operator World Mobile shows.

More than half (54%) of African senior executives expect spending on tech start-ups on the continent will more than double by 2025 to $10 billion or over compared with the $4.9 billion raised last year**. Around one in six (16%) believe more than $15 billion will be raised.

The study with African business leaders from companies with total annual revenues of more than $6.75 billion identified foreign direct investment and improving internet connectivity as the key drivers for the expansion.

Around three-quarters (75%) believe the investment will come from Western countries while 66% believe China will be a major source of investment. Nearly six out of 10 (57%) believe dramatic improvements in internet connectivity will be the main support for expansion as it drives education, healthcare, and business.

The research among senior executives at companies with average annual revenues of $70 million based in Tanzania, Angola, Botswana, Cameroon, Ethiopia, Ghana, Nigeria, and South Africa found nearly half (45%) believe Africa will be a tech superpower within 10 years.

They point to the development of Africa’s tech ecosystem – nearly 90% of those interviewed expect it to grow by at least half its current size in the next three years with 15% expecting it to double in size during that period.

That in turn will expand Africa’s role in supplying technology to the rest of the world – around 60% of executives expect that to grow in the next five years with one in 10 predicting dramatic expansion.

Micky Watkins, CEO of World Mobile said: “Africa is seen as ripe for economic expansion by its own business leaders and technology will play a vital role in delivering the development.

“The potential is huge as currently Africa only accounts for 0.2% of the global money invested in technology start-ups so there is capacity for growth and huge interest from Western and Chinese foreign direct investment.

“Much of it hinges however on improving internet connectivity and particularly in areas which are hard to reach and ignored by traditional companies. We are committed to playing our part in supporting the development of technology businesses throughout the continent.”

World Mobile is helping to revolutionise internet connectivity in sub-Saharan Africa and is already working with the government in Zanzibar where it is launching a unique hybrid mobile network delivering connectivity supported by low altitude platform balloons.

Its blockchain-based network vastly reduces capital expenditure and cuts prices compared to traditional telecom operators and World Mobile is expanding in Tanzania and Kenya, as well as other territories underserviced by traditional mobile operators.

Its balloons will be the first to officially launch in Africa for commercial use, offering a more cost-effective way to provide digital connection to people and is the first step in its mission to help bring nearly four billion people online before 2030 in line with the UN and World Bank’s SDGs.

The World Mobile approach is more sustainable, in environmental, social and governance terms. Environmental impacts are mitigated using solar-powered nodes, second-life batteries, and energy-efficient technology. World Mobile creates a positive societal impact through the application of its circular economy model – a “sharing economy” where locals share in the ownership and rewards of the network. Governance is maintained by the secure underlying blockchain technology, which means that user data privacy is guaranteed and not commercially applied as it is by other mobile operators.

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