South African Startup Ecosystem Report 2022

The Cape Innovation and Technology Initiative (CiTi) is delighted to sponsor and partner with Disrupt Africa to bring you the 2022 South African Startup Ecosystem Report and to enable the widest possible free access to all the participants in the South Africa Tech ecosystem.

 

Recognised as Africa’s most experienced technology incubator, we at CiTi and the Bandwidth Barn have had a ringside seat to the evolution of technology driven start-ups in Africa. CiTi is proud to be a key catalyst to the creation of the mature start-up ecosystem in South Africa. The maturity of SA’s start-up ecosystem is evidenced by the fact that SA leads the continent when it comes to acquisitions and exits.

 

We believe that the best opportunities for economic growth and job creation in South Africa will be unlocked by entrepreneurs who are agile and able to scale their businesses. Examining the economic constraints in our country now, we recognise that agile entrepreneurs have enormous opportunity to accelerate the country’s economic trajectory upwards.

 

We also passionately believe that tech-driven innovation can transform lives across the continent. Following the money, the trend line affirms that this is accepted by the market. VC investments in South Africa have grown from US$50m in 2015 to close to US$350m in 2021.

 

As you will learn from the report, early-stage start-ups do not want for incubation or acceleration support, however, there remains a shortage of quality acceleration programs which cater for high growth/high potential, start-ups, especially those which are able to support the venture build process through to VC funding. CiTi has established both Injini and BioCiTi to meet this demand, especially in so far as specialised incubation and acceleration is concerned. Injini plays a huge role in the growing EdTech ecosystem, with touchpoints to almost every EdTech start-up in SA, with its programmes and activities crossing borders to reach thousands of EdTech innovators around the African continent.  BioCiTi has a strong focus on supporting the commercialisation of IP for BioTech start-ups and scale ups. Specialised incubation and acceleration have the proven ability to de-risk VC investment as evidenced in mature VC countries. CiTi’s holistic cluster-driven approach serves potential high growth start-ups in high growth areas.

 

We have noted the proliferation of co-working space and so called hubs (340 across the country) and the current temptation of landlords and entrepreneurs sitting with surplus space to add tech or innovation to their premises branding, however in our experience, without focused entrepreneurial support programs, these amount to no more than a traditional real estate offerings and do not play a meaningful role in supporting the tech start-up ecosystem. We believe that our cluster-based approach along with domain specialisation has stood the test of time and will continue to serve the SA tech and African start-up ecosystem well.

 

We continue to recognise the importance of accurate data and information to potential funders, tech hubs, ecosystem enablers, policy makers and entrepreneurs themselves. To this end, Injini officially launched the Injini Think Tank (ITT), our first dedicated research and advocacy division in the CiTi group, in April. The Disrupt Africa SA Start-up Ecosystem report will further enhance decision-making for stakeholders of the start-up ecosystem and hopefully Government policy makers at every level.

 

Early-stage incubation support also remains a key pillar to creating a vibrant (and investable) start-up ecosystem where customised and bespoke guidance and interventions can generate exponential returns in the long term.

 

For SA to remain a vibrant and competitive home to tech start-ups, it remains critical for us to bridge the inherent digital literacy gap due to our inadequate schooling. Therefore, the role of digital skills accelerators, such as CapaCiTi, in supporting a vibrant tech ecosystem, cannot be underestimated.

 

Cape Town leads the way in Insuretech and e-commerce, which is not surprising given its rich corporate “head office” history in both the insurance and retail spaces. Johannesburg is the home of the most FinTech start-ups, 74, with Cape Town trailing with 61 companies, again probably a result of JHB’s legacy “business capital” role.

 

We believe that AgriTech is an area filled with opportunity for entrepreneurs in SA and we endorse the conclusion within the report, that this sector is a missed opportunity for now.

 

Looking forward at CiTi, we will continue to build on our FinTech, EdTech, BioTech and Township Economy initiatives and look forward to supporting the tech innovation taking place in the decentralized “Web3” economy and in energy and water sustainability in the near future.

 

Opportunity for entrepreneurs in South Africa abounds and we look forward to another 22 years of collaborative and productive partnerships. Enjoy the report, it is our privilege to make it available to you.

 

Download the South African Startup Ecosystem report below.

 

South African Startup Ecosystem Report 2022 1

 

Ian Merrington

CEO – The Cape Innovation & Technology Initiative

 

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