This article was contributed to TechCabal by World Mobile.
Africa is primed to experience an entrepreneurial boom in the coming years, but the continent cannot ignore the limitations surrounding internet connectivity and digital skills education.
More than 4 out of 5 VC and private equity investors are predicting an entrepreneurial boom in Africa but warn a lack of digital skills and poor internet connectivity is holding back start-up businesses on the continent, new research* for blockchain-based mobile network operator World Mobile shows. Furthermore, an estimated 81% of surveyed senior executives at venture capital and private equity companies predicted a rise in entrepreneurialism in Africa over the next 3 years, with nearly half (47%) expecting a dramatic increase.
These industry experts believe that if more entrepreneurs flood the African market, we will see more valuable startups come out of Africa. Currently African startups are valued at around $7.6 billion – around 0.2% of the total $3.8 trillion value of star-ups globally**. Failure to improve connectivity, however, will put a brake on growth.
Around 91% of the senior VC and private equity executives questioned across the UK, US, the Middle East, Singapore, Hong Kong, France, and Germany believe that startup valuation will more than double over the next five years as long as the business environments in African countries with booming tech ecosystems – such as Nigeria, Kenya, South Africa, and Egypt, prioritise improving digital infrastructure.
Around 60% of surveyed VC executives believe that the lack of digital skills is currently a major block to developing a startup culture in Africa. More than half of the investors questioned (~53%) are convinced that limited access to VC funding and poor internet connectivity (according to 25% of surveyed participants) are creating roadblocks to entrepreneurship on the continent.
A number of VC investors are optimistic – around 2 out of 5 (42%) – expect dramatic improvements in internet connectivity while 44% expect slight improvements. Around 78% expect funding to improve and 86% believe the digital skills gap on the continent will close.
More than half of those questioned (52%) believe improvements in internet connectivity will drive the rise in entrepreneurial spirit in Africa while two-thirds (65%) are confident the business environment will continue to improve.
According to Micky Watkins, CEO of World Mobile, “…entrepreneurialism is growing rapidly across Africa but the current value of start-ups on the continent is just 0.2% of the value of start-ups globally and could be much higher.
“Venture capital and private equity investors are clearly very optimistic about the future for start-ups but like in many countries they see potential roadblocks including lack of funding. Africa also however suffers from poor internet connectivity which has an inevitable knock-on effect for the digital skills needed in start-ups.”
World Mobile is one of the major innovators revolutionising internet connectivity in Africa and is already working with the government in Zanzibar. The company’s innovative solution includes launching a unique hybrid mobile network delivering connectivity supported by aerostats backed up with a range of technologies including mesh networking, hybrid spectrum, renewable energy, and blockchain.
“The importance of internet connectivity to support entrepreneurs will only grow in the future but there are still areas where delivering affordable and reliable connectivity remains an issue. World Mobile’s network based on the sharing economy sells affordable network nodes to local business owners, so they have the power to connect themselves and others while sharing the rewards. This will enable more people to access the opportunities that internet connectivity creates.”
* Independent research company PureProfile interviewed 100 senior private equity and venture capital executives based in the US, UK, Saudi Arabia, the United Arab Emirates, France, Germany, Hong Kong, and Singapore in June 2022.