The ‘big four’—Nigeria, Egypt, South Africa, and Kenya— are all known for pulling the weights in Africa’s tech ecosystem, however, new countries are emerging as frontiers and are rapidly carving out their space in the tech landscape.
Africa has enjoyed unprecedented advancements in tech innovations and entrepreneurship over the years. Propelling it onto the global tech stage has been ‘the big four’—Nigeria, Egypt, South Africa, and Kenya—grabbing the spotlight with their impressive tech ecosystems. Among the seven unicorns that Africa has produced, the big four take heavy representation. Also, in the recently released Africa’s fastest growing company list, the big four take the lion’s share of eighty-one companies out of a hundred countries listed.
Per Crunchbase, Africa has about 2,461 startups, the big four score a large representation of these with 2,217 startups across different verticals. According to startup list Africa, the big four have done a combined cumulative funding of over $24 billion—with Nigeria having a share of over $6.7 billion in investment, Kenya with over $4.1billion, Egypt with more than $3.1billion, and South Africa flush with $10.3 billion in startup investment. Also, the total deal count between them was 3,503 with 103 mergers and acquisitions.
While regional influence, market size, and great infrastructure allow the big four to conveniently steal the spotlight. Other African countries are emerging, these countries show promise to be powerhouses in the distant future. This piece highlights a curated list of these African countries that are rapidly carving out their space in the tech landscape, driving economic growth, and fostering digital transformation in their spaces.
Francophone frontiers: Senegal, Morocco, DRC, and Mauritius
French-speaking countries in recent times have been gracefully defying expectations in the startup scene and propelling their influence far beyond their linguistic boundaries. The Global Startup Ecosystems Ranking places Morocco and Senegal at the top of a list of some of Africa’s largest movers, a development that could considerably increase the awareness of startups in those nations and give them access to investor growth money.
According to the ranking, Morocco moved up 16 positions, to the 79th slot globally while Senegal climbed 13 positions to 92, debuting in the top 100 clubs of nations hosting startup ecosystems. Senegal’s ranking was buoyed by improved rankings of cities, according to the Global Startup Ecosystem Index 2022, an index created by StartupBlink.
In 2021, Wave—Senegal’s posterchild and mobile money startup—raised the biggest-ever Series A round of an African startup, pushing its valuation to $1.7 billion, making it Africa’s first francophone unicorn. Per The Big Deal, Senegalese startups raised $91.6 million in 2022.
Mauritius has also been punching above its weight in recent times, the country had three entries in the recently released Financial Times report on Africa’s fastest-growing companies. According to the Global Startup Ecosystem Index 2022 report, Mauritius was on the 71st spot. The island nation moved up two positions, thanks to the debut of two of the country’s two cities – Port Louis and Grand Baie – in the top 1,000 list of cities.
The Democratic Republic of Congo is also gunning for a place to be a regional leader in the francophone space. Per The Big Deal, startups in the country raised a comulative sum of $39 million in 2022. Altech, a clean energy company recently clinched top spot in the Financial Times report on Africa’s fastest-growing companies. The company also recently announced a $18m debt funding round to expand access to energy in the Central African country.
Ghana—following the giants’ path
Although the startup growth experienced in the last year might not be astonishing due to the slump in investment. However, west African startups lead the regional picture in Africa, accounting for $1.8 billion in funding. While Nigerian startups represent almost 70% of that figure, Ghana comes second, garnering $390m in deals in the past year, per The Big Deal.
Chippercash became a Unicorn in 2021 after a $150 million extension round led FTX to score a major win for the tech ecosystem in the country. The country has a growing number of startups that have raised significant funding and are thriving in the ecosystem. Apart from Chippercash, which has raised a total of $302 million in funding, mPharma, a healthcare startup, raised $35 million in 2022, increasing the total amount raised to $85 million.
North African powerhouses: Algeria, Tunisia, and Morocco
Startups in Algeria, Tunisia, and Morocco raised a combined $559.57 million in 2022, per The Big Deal. Tunisia pioneered the Startup Act wave for African countries in 2018. According to Africa Business, a pan-African business publication, “Tunisia’s Startup Act has become a blueprint for many African countries.” The Tunisian startup act has been instrumental to the countries startup growth.
Unlike other laws that emanate from government representatives or members of parliament, the Tunisian startup act adopted a participatory approach that accommodated opinions of actors within the startup ecosystem—entrepreneurs, investors, civil societies, legislatures etc. The startup act with the mission to spur innovation demand and foster entrepreneurship in the country seem to have been working as Tunisian startups have been receiving continuous investments and participation from global players. Last year, Tunisian startups received $151.6 million in investment with a large chunk of the startup investment going into logistics and transportation startups.
According to the Global Startup Ecosystem Index 2022 report, Morocco’s startup scene saw an increase in 2022 and jumped 16 spots from the previous year. Currently 79th in global ranking and second in Northern Africa—only behind regional leader Egypt. Morocco is fast becoming a darling to investors due to its “strategic” geographical location, making it a gateway to Africa, Europe, and the Middle East. Its proximity to Europe allows easy access to markets and resources, making it an attractive location for startups looking to expand globally. According to The Big Deal Moroccan startups raised $18.57 million in 2022.
Since 2022, Algeria lost the number one spot on the Global Startup Ecosystem Index, having now positioned itself as 117th worldwide. Ranked number four in Northern Africa behind Tunisia, Morocco, and leader Egypt. Tunisian startups received $119.41 million in 2022 per The Big Deal.
Government support of the startup ecosystem in Algeria has been laudable. Recently, the Algerian government established a “Ministry of Startups” in the country. The country also backs startups in its ecosystem with the Algeria Venture, a public accelerator that helps project holders to scale up, raise funds and solve problems.
While the divide is wide between the “big four” and its emerging challengers, Africa’s tech ecosystem shows promise of being a frontrunner on the global stage when these challengers fully morph into leaders.