2022 saw a record-breaking boom in capital raised by African tech startups, with the eighth edition of the annual African Tech Startups Funding Report released by Disrupt Africa in January reporting 633 startups raised a combined $3.3 billion over the course of the year.
Despite the positive outcomes of 2022 in terms of capital, 2023 has yet to see such a positive yield. In the year's first quarter, startup funding fell by 57.2% compared to the previous year's period. Less than half the number of startups secured funding in the first quarter compared to the year before, with those startups securing a total of $649 million, down from $1.5 billion in April 2022.
In response to outdated regulations, governments in Nigeria, Ethiopia, Senegal, Kenya, and Tunisia have passed individual bills to protect and allow startups to build products and scale up their businesses successfully. Here are some of the ways in which African governments are protecting and encouraging sustainable growth for tech-focused startups.
South Africa is struggling through an energy crisis. Scheduled blackouts, known to locals as ‘load shedding’ are crippling South African businesses and the larger economy, but how is this failure to resolve this issue rippling into the rest of the continent and what effect is it having on the startup boom?
South Africa has restrictions on privatisation of energy suppliers with ESKOM being the near-sole provider of electricity for the country at 95% (making up 45% of the continent’s energy supply). You can read at length about how this energy crisis started but we would like to focus on the specifics of how it is affecting the economy and therefore the startup sphere.
The end of 2022 saw the dawn of Artificial Intelligence driven tools set to streamline the modern workforce, tools such as ChatGPT and Dawn AI are now commonly mentioned in conversation around the digital water cooler.
The power of AI lies in its ability to combine and process large amounts of data, allowing it to automatically learn by identifying patterns or features to predictively solve problems before they arise. It is rapidly transforming the tech industry, and according to the African Development Bank 2021 report The Future of Work: Regional Perspectives, Africa is set to be at the forefront of this transformation due to its large youth population and increasing access to mobile and internet technologies.