Why 2017 was the year Africa’s tech startup scene really kicked off
Africa has been gaining attention in the tech scene for a number of years now, but the excitement surrounding Africa’s technology prospects focuses on its potential rather than the current state of things.
Africa is a continent to watch with interest, where investors wait to pull the trigger at the opportune moment.
For many, this moment came in 2017 during which African tech startups raised a record-breaking $650m from investors – more than a 50% increase on the previous year. A growing number of investors think now is the time to back Africa’s startup scene and the conversation is less about potential now and more about realising it.
Africa, Kenya and Nigeria leading the way
As Quartz reported earlier this month, South Africa, Kenya and Nigeria are still attracting the most interest from tech investors – and by quite some margin. However, Rwanda is proving it can become one of Africa’s leading tech nations, despite being one of its smallest, which speaks volumes about its economic progress over the past couple of decades and its focus on technology innovation.
However, the top three continue to dominate with South Africa, Kenya and Nigeria generating 76% of Africa’s tech investment for 2017. This is down from 81% from the previous year, which means Africa’s other tech innovators are closing the gap on the leaders.
Things are looking up for Africa’s tech startup scene.
Producing the goods
While investment is important, Africa’s tech scene won’t confirm its place on the global stage until it starts producing the goods – innovations that solve real-world problems. This started happening on a wider scale in 2017, starting in January with 2KUZE, an agtech app launched by Mastercard that connects small-plot farmers to markets, payments and logistics services in Kenya, Uganda and Tanzania.
In March, Kenyan communications company BRCK released its waterproof, solar-powered Wi-Fi box, SupaBRCK, that operates as a 3G hotspot and off-grid server.
Nigeria is also putting Africa on the blockchain route with SureRemit, a platform that allows immigrants to send remittance to their family members back home without the fees and delays typically involved.
In July, scientists from Nigeria and Ghana launched satellites into space with the help of SpaceX and NASA.
There were some casualties in 2017, though
As Africa’s tech scene progresses, there will be some casualties that fail to keep up, of course. In September, Y Combinator-backed French language VOD startup Afrostream shutdown due to financial and legal implications. In November, Jumia e-commerce competitor Konga cut 60 percent of its staff and closed its pay-on-delivery service in order to reduce expenses.
Such casualties are necessary for African tech startup scene to reach the next level – not everyone will make it.
There are other challenges facing the continent’s technology prospects, too. Internet blackouts are becoming too regular in a number of countries as governments move to suppress communications. Several innovators across the continent have also expressed concerns about some African governments failing to look beyond technology as an isolated industry instead of one that can transform all industries if it’s adopted in the right way.
A positive outlook for 2018
Despite the challenges facing Africa’s tech startup scene, a growing number of countries are proving they have what it takes to live up to the hype. South Africa, Kenya and Nigeria still lead the way but other African nations are closing the gap and 2018 is expected to be another good year for African technology innovation.
Cybersecurity company WISeKey is gearing up to use blockchain technology in Rwanda to decentralise land registry so records can’t be tampered with. Rwanda is also starting to use drones to deliver emergency medical supplies and other essentials in a project that’s due to expand into Tanzania this year.
The key areas of green energy, agtech and e-health will only become more important in 2018. Agriculture remains the continent’s single largest industry but food shortages are still regular occurrences in places. Delivering electricity to everyone in a sustainable, eco-friendly manner is another priority for African nations and new innovations are bringing this day closer every year.
If 2017 was the year Africa’s tech startup scene kicked off, 2018 is the year where its innovators will start fulfilling the potential investors are buying into.
Featured image: Public domain