The startup ecosystem in South Africa is a buoyant and dynamic industry propelled by innovation, entrepreneurship and a growing economy. The country has witnessed a significant surge in venture capital investment in the past five years, with total funding surpassing USD 2 B.
South Africa's stable political conditions, robust infrastructure, and a sizeable consumer market have laid a solid foundation for economic expansion.
Additionally, the strong GDP growth rate, averaging around 1.5% before 2020, has attracted investment and innovation. Despite grappling with challenges like high unemployment and income inequality, the startup sector in South Africa presents an array of opportunities for tech innovators to carve their niches.
The funding numbers may not be as explosive or eye-catching as those of the other ecosystems in the past few years, but what stands out is that the ecosystem has not experienced too much turmoil in these difficult times.
All in all, the volatility of external funding has not dampened the entrepreneurial culture too much in South Africa. So, the big question is, what sets it apart from other key markets?
I caught up with Will Green, who has spent over 24 years in the South African ecosystem building startups or helping startups grow. He was also part of the Grindstone Accelerator, where he has helped many companies progress through different stages of their journeys. He is currently building two platforms aiming to solve some of the biggest problems in Africa’s venture capital space: Access to wisdom (The Board of Wisdom) and access to capital (Capital Engine).
Here is a brief compilation of my conversation with Will, where I sought to decode what's different for the South African ecosystem.
Slowdown and Shutdowns
While shutdowns and operational downsizing have plagued several corners of the African tech space, South African startups have showcased remarkable resilience. While acknowledging the role of infrastructure and access to capital, it's notable how the ecosystem has weathered turbulent times without succumbing to significant upheaval.
Of course, many would say that the infrastructure reach and access to capital are strong factors, which is true, but are these only contributing factors to South Africa's growth?
