Unleashing Africa’s potential: A vision for innovation and entrepreneurship

Africa Business

Image used for illustrative purpose. Getty Images

SA Innovation Summit CEO Buntu Majaja looks back at this year’s successes and quantifies next year’s opportunities.

– SAIS2023 brought together 2,600 innovators from 26 countries

– The investment capital in attendance equalled around R30 mbillion

– Startups are pivoting to or building on AI

In the dynamic world of technology and entrepreneurship, the courage and determination of startup founders is invigorating. As the CEO of the SA Innovation Summit, witnessing these entrepreneurs, often unsure of their own capabilities until the moment of truth, fuels a passion for the role and a deep sense of responsibility as an enabler for the industry.

It’s believed that everyone possesses an innate desire to contribute positively to the world, and it is this entrepreneurial spirit that is seen on display at the summit.

South Africa is undoubtedly poised to secure its future economy, even amidst these uncertain times. The summit not only attracted startups and investors, but also spectators seeking inspiration.

This active community, always on the lookout for the next big thing, is a testament to the country and continent’s entrepreneurial mindset. By supporting entrepreneurs, everyone is contributing to job creation – an important consideration anywhere in Africa – and fostering an entrepreneurial culture.

Taking stock

In 2023, the summit focused on exploring Africa’s innovation frontier. In fact, we left a space in front of Africa’s innovation frontier in order to create that engagement and buy-in for all who attended. You were free to insert a verb of your choice to personalise not only the conference experience, but your commitment to the founders and innovators.

Those nearly 2,600 registered attendees came from 26 different countries across 6 continents. Over half (15) of the countries represented were from Africa, which indicates a deep desire for interaction that was maybe missing from the innovation landscape in the post-pandemic times.

Founders who toiled in isolation were once again gathered together for face-to-face dialogue and discussion.

There’s a challenge to the perception that Africa lacks the technological capabilities to compete globally. It has been argued that Africa has all the necessary capabilities; but that the use cases are so much different than in more developed economies that it makes directly importing technology or solutions difficult.

The reality of the challenge that we see lies in redefining what investing in innovation looks like in Africa, and how venture capitalists can achieve a return on social investment.

Those dollars make a difference on a deeper level in Africa. It uplifts entire communities which, in turn, inspires more innovation as the elevated technological minds seek new ways to harness the power these digital solutions have unlocked.

Fintech leads African innovation

Standout trends at this year’s summit was a downturn in numbers of crypto-oriented startups. This didn’t affect the general fintech startup ecosystem, though, with the total count of fintech startups in Africa rising to 678 in 2023. This is up from the 576 Disrupt Africa counted in 2021.

That 17.7% increase in fintech startups mirrors the growth rate observed between 2017 and 2019 during which the number of active ventures rose by 17.3% on the back of the blockchain hype. During that period the number of blockchain startups active in Africa leapt 150% to 45 (9.2% of the fintech total).

In 2023 only 37 blockchain startups remain active on the continent, accounting for just 5.5% of the fintech total. More than half of those startups are from Nigeria, with 21 startups while South Africa is home to 9, and 3 found in Kenya.

In total, the count of active fintech startups in Africa has surged by 125.2% from 2017 to 2023.

With its rapid adoption, vast consumer demand, and limitless application possibilities in an untapped market, Africa, particularly South Africa, could be on the brink of becoming a sought-after global crypto valley.

This is in stark contrast to mature economies that are burdened with legacy systems. The key factor here is the competitive talent pool. Given the right nurturing, we believe it has the potential to create a standout blockchain ecosystem.

AI dominates the future

Looking ahead to 2024, a wider adoption of artificial intelligence (AI) is anticipated. Many startups at the 2023 summit were either pivoting to AI or building their solutions on top of AI. It’s believed that we have yet to fully explore all the ways AI can be used to improve lives in Africa.

Despite a dip in venture capital funding in Africa in 2022, optimism about the future prevails. A return to 50-75% year-over-year growth in startup investment in Africa by the end of 2024 is predicted. The cyclical nature of the market, with technology trends ebbing and flowing as they mature, is acknowledged.

Out of the businesses that came to SAIS 2023 with funding ambitions, 50% were at seed stage and 28% ready for venture capital. Nearly a quarter of those startups asking for more than a million dollars to scale to the next phase.

Startups can save the continent

Finally, confidence is high that the startup community can rise to the challenge of saving the continent with much needed job and economic opportunities. SA Innovation Summit 2023 brought together investors representing around $1,5 billion in assets under management, demonstrating the immense potential and promise of Africa’s entrepreneurial landscape.

In meeting rooms and hallways hosted a pipeline of over 80 startups with a collective deal flow of $21.6 million. This leadership and vision underscore the importance of fostering an entrepreneurial mindset to secure a prosperous future for Africa.

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