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In the wake of Africa’s economic and educational development, local startups have grown all over the continent. Like stated in our previous article about mobile and digital Africa, lack of infrastructure combined with increased access to education meant a number of startups have provided new solutions to existing problems.
That development has given rise to a host of African homebrewed startup incubators, across the continent. Senegal’s CTIC, MEST in Ghana, TEKXL in Benin, and iHub in Kenya are only some of the most prominent and most recent startup incubators to have launched on the continent.
In Kenya, these incubators have given rise to such start-ups as Sendy (a motorbike-based delivery company), OkHi (a post-box system) and CardPlanet (a smartcard provider). Even before the generalization of incubators, techn startups like M:PESA and Ushahidi had begun the revolution in East Africa. In fact, their creation started a cycle of startups helping drive the next generation of business creators: Ushahidi’s founder is also the creator of iHub.
None of these startups, nor most of the best-known ones elsewhere in Africa, have undergone IPOs yet. Some, however, are well on their way. Most have received some sort of government support, whether financial or not, as states recognize the importance of a homegrown startup scene. However, the largest part of their funds of their funds comes from venture capitalists, and investment from VC’s into Africa is growing into the billions of dollars.
What’s more, a number of local startup scenes are benefitting from investment by the African diaspora. Immigrants and their children – second-generation mostly – are reinvesting in African startups at an interesting rate. With access to the startup scenes in two countries – their homeland and the country they live in – members of the diaspora have more reference points to create and maintain startups with innovative concepts. Having understood the impact the diaspora can make, the startup consultancy Tiphub now hosts the Diaspora Demo day, an event geared at presenting emerging tech startups to the African diaspora as a networking opportunity.
What does this mean for African talent? First of all, as with the other changes on the continent, companies’ needs for talent will evolve. Mechanical engineers, financial experts and sales managers will still be needed, but African businesses will soon need a large number of software coders, designers, and other innovators. What’s more, the multiplication of local startups means two things: The rise of African venture capitalists, potentially borne of the first generation of successful entrepreneurs, in order to launch new concepts. Trailblazers such as Senegal-based Teranga Capital have already been successful in that market. These will inject capital more easily in local businesses – startups of course, but also more established businesses – which in turn will lead to more investment in capital and personnel; thereby accelerating the race for talent.
Others will found schools, taking their cues from their Western equivalents such as American Bill Gates or Frenchman Xavier Niel, providing education. This will end up feeding into a cycle of development that is bound to be quicker in Africa than it had ever been in Europe or America, and positioning Africa to be a powerhouse of tech and non-tech startup development for the 21st century.