The Bright Future Ahead for the African Tech Startup Ecosystem

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There is no doubt that 2016 was a horrible year for famous people.  However, it surely was a great year for the African tech startup ecosystem.

What should we expect from 2017? We look ahead to the next 12 months and speculate on how the scene will develop.

Diagnostics will be a big deal

It has long been known that e-health has tremendous potential to make the delivery of healthcare in Africa more efficient. It is now becoming clear that this will be in the diagnostics space.

In South Africa, hearScreen and Vula Mobile are becoming market leaders. Uganda’s Matibabu is focusing on malaria. Nigeria’s Aajoh is using artificial intelligence (AI) to diagnose patients. Zimbabwe’s Dr CADx is doing the same.

These technologies can be revolutionary, and can create big businesses. Expect to see serious progress from the above five and many others in 2017.

Fintech to become pervasive

2016 was a big year for the likes of Zoona and Nomanini, with fintech quickly becoming the hottest ticket in town.

There are good reasons for this. Tech startups, rather than banks, will play the key role in giving more people access to financial services, and 2017 looks set to be a bumper year.  As a result we can expect investments into fintech startups to become more common than they already are.

Blockchain rather than bitcoin

Bitcoin may have had its day in Africa, but the blockchain – the technology behind it – has not. Barclays Africa played a part in the first ever live trade transaction using blockchain, which demonstrates the tech’s potential.

South African startup Custos is one of the companies that has realized the potential early. However, we can surely expect more startups to take the role blockchain can play in a number of spaces.

Tech hubs to monetise through services and funds

The way Kenya’s iHub is looking to make itself commercially viable through services and funds will likely become a marker for Africa’s many tech hubs.

Startups such as the Lagos Co-Creation Hub have already led the way. But we can expect 2017 to be the year that the continent’s vital tech hubs finally find a way to sustain themselves in the long term.

Interest to spread beyond South Africa, Kenya and Nigeria

South Africa, Kenya and Nigeria are the major startup centres of Africa, that is beyond doubt.

However, as we continue to pull data together for annual African Tech Startups Funding Report (due for release later this month), we are noticing a trend towards investing in startups from other countries.

So expect investments in countries such as Senegal, Zambia and Morocco to increase in 2017.

Acquisitions to grow

Funding has been on the rise, but the number of acquisitions has remained small.

That has changed a little in 2016, but we can expect more in 2017 as startups founded five or six years ago come to maturity and make themselves targets for acquisition.

More exits can only serve to encourage further investments in African tech startups.

Global institutions to up the stakes

Major global institutions will become more active in the African startup ecosystem.

2016 saw the World Bank launch accelerator programmes for startups across the continent, while the European Investment Bank (EIB) and the African Development Bank (AfDB) joined forces to launch the US$160 million Boost Africa initiative.

Expect to see more institutions increasingly turn to backing tech entrepreneurship to support African development without resorting to aid.

About Author

Passionate about the vibrant tech startups scene in Africa, Tom can usually be found sniffing out the continent’s most exciting new companies and entrepreneurs, funding rounds and any other developments within the growing ecosystem.

 

Joanes Legiste

Discussion2 Comments

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