African startups need a supportive and responsive ecosystem to succeed, according to Startups Lead, Office of Africa Transformation. MicrosoftGerald Maitya.
« Africa’s vibrant startup market is one of the cornerstones of the continent’s digital economy. For good reason, startups are capable of promoting and supporting local innovation, but also greatly help to find appropriate solutions to the continent’s many social challenges.” Mr. Maithya was quoted as saying by Microsoft in a statement.
Thus, according to the research firm “Africa: The Big Deal”, in the first six months of 2022, funding for startups in Africa has doubled to reach $3.14 billion. Nigeria, Egypt, South Africa and Kenya are the main investment destinations on the continent, with fintech as the sector that monopolizes the lion’s share of these investments at the moment.
The ecosystem of startups in Africa is growing at an astonishing pace and investments there are simply staggering. According to the OECD, there are now more than 640 active technology hubs across Africa: these continue to stimulate and support innovation, but also create jobs, especially for young people.
Despite boasting simply enormous potential, the African startup market currently accounts for less than one percent of global funding. So, what is stopping African startups from standing out and entering the international market? Many factors come into play, however systemic barriers in startups’ innovation ecosystem continue to reduce their chances of success.
At Microsoft, we strongly believe that the ecosystem must be inclusive and open, and that one company cannot succeed alone – it must be supported by an entire network of other companies that collaborate with it to help design solutions that fit the market. Mr. Maithya wrote. Accenture’s report entitled “Technology startups can support Africa’s growth” describes the expanding power of ecosystems in these terms: “An ecosystem is defined by the depth and breadth of potential collaboration among a group of players: each of these players delivers. An element of the solution is ultimately delivered to the consumer”.
The players in the startup ecosystem are very diverse: they can be startups, market players, potential customers (organizations or individuals), governments, regulators or technology development partners…
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Not only must the ecosystem always keep its startups at the center, but financial institutions and government partners must always be sufficiently engaged so that their synergies can create a truly inclusive and sustainable economic impact.
To succeed, startups need access to the right technology, but also the right people and the right business structure. The ecosystem must respond to all these concerns in a holistic way so that startups can register their activity in the logic of growth.
In this regard, experienced mentors from large companies and venture capital firms have an important role to play. Recognizing all these needs, Microsoft has launched Founders Hub, a self-service center that offers a wide range of resources to young companies. Currently, more than 1,000 startups benefit from the presence of such a platform.
Startups always reap tangible benefits by adopting an ecosystem approach
Artificial Intelligence (AI) technology will significantly contribute to boosting the economies of the Middle East and North Africa by 2030.
Synapse Analytics is an Egypt-based company that helps organizations develop, build, manage and scale their AI solutions.
By working with Microsoft ATO, Synapse was able to dramatically accelerate its development.
The uniqueness of each sector is important
Focusing on a specific industry allows startups, companies and potential investors to better connect with each other. Partner companies, customers or potential funders will always find value in startups that are ready to adapt to the specific needs of experts in each field.
Technology accelerators play an important role in helping startups identify and be very clear about the sectors they are targeting first, but also the problems they are trying to solve and the opportunities in each specific sector.
Recognizing the important role that accelerators can play, Microsoft has signed several partnership agreements with technology accelerators across the continent to support startups with business education programs and dedicated techniques.
Health technologies offer potential solutions to the lack of health facilities and skills, especially in remote areas of Africa. For example, Moroccan startup Depecho uses AI to help radiologists and doctors make video diagnoses with prenatal ultrasounds. Such diagnostics play an important role in preventing birth defects, addressing premature births, and more. This is especially important in isolated areas where hospitals are typically understaffed and under-resourced.
Startups like Deepecho are making a significant contribution to the healthcare sector in Africa. By sealing the partnership with ATO, Deepecho has been able to move its product through various development stages so that it is now ready for use in hospitals across the continent.
Governments have an important role to play in enabling startups with viable products In this regard, governments and regulators play an important supporting role by implementing strategies and regulations in this direction.
The “Tony Blair Institute for Global Change” notes in its report titled Supercharging Africa’s Startups that the cost of regulatory compliance registered in 54 African countries is still high for technology startups. Leaders must therefore develop a common framework that is compatible and promotes access to regional markets. Regulators play an important role in transparency and equal opportunity in the startup ecosystem.
Governments should work to create a supportive ecosystem based on established collaboration networks between large companies and startups, including private sector incubation programs and collaborative innovation.
An eco-friendly environment that benefits the entire continent, this environment supports startups that serve SMEs, regardless of whether they operate in AgriTech, FinTech or other sectors… By creating solutions that are relevant to the SME market, start-ups enable. They have to follow their own development path.
There is no simple and universal miracle solution to support startups and guarantee their success. However, creating a supportive ecosystem can significantly boost the growth of the startup sector in Africa, driving economic growth across the continent, the report concluded.
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