Look back five years, and inspect the cohorts accepted onto various programmes by acclaimed international accelerators such as Techstars, Y Combinator, and 500 Startups. See any African startups in there? No, probably not.
Fast forward to 2016, and what started as a trickle in the last 18 months or so has now become a wave. February alone saw three African companies join US accelerators, gaining access to the funding, training and access to networks that goes with that. This trend is set to continue.
Kenya’s Bamba Group will take part in the Techstars accelerator held in Austin, Texas, while Egyptian bug-reporting app Instabug joined Y Combinator. Nigerian e-commerce startup Podozi will take part in the 500 Startups programme in Silicon Valley.
The trail for these startups has already been blazed. 500 Startups has led the way, selecting South Africa’s SweepSouth and Ghana’s Kudobuzz for a programme last year, and startups from Kenya and Egypt the year before. The company has also launched 500 Falcons, a US$30 million fund for investing in startups from the Middle East and North Africa (MENA) region.
But other global accelerators are increasingly focusing on Africa too. Techstars teamed up with Barclays to run the bank’s fintech accelerator programme at the end of last year and will shortly be running its own African accelerator for the first time, in Cape Town. Startupbootcamp has started a number of initiatives in South Africa and recently selected a Tanzanian startup to take part in its London insurance accelerator programme.
Further developments are to be expected as the year progresses, and African startups increasingly attract the attention of global players. But what is behind this growing interest in the continent’s startups?
Yossi Hasson, the new managing director in Africa for Techstars, believes it is being driven by a combination of factors, including the growing maturity of local entrepreneurial ecosystems in the various countries, which are in turn producing better entrepreneurs.
He also says there has been a change in perception of entrepreneurship in Africa, with a growing feeling that it is a respectable and desirable field to go into.
“This change in perception has been driven through the media over the years building “rockstars” out of successful entrepreneurs both locally and abroad,” Hasson said.
“The respectable professions of the past was becoming a doctor or accountant – today, being an entrepreneur has become more mainstream.”
The increase in bandwidth penetration and proliferation of information has also played a part.
“This has allowed local entrepreneurs to gain invaluable access to the global startup ecosystem and gain a better understanding of the various programmes on offer around the globe and how to make themselves appear more desirable for these programmes,” Hasson said.
Moreover, Africa has great demographic potential, being the home to over one billion people and a number of fast-growing economies, in contrast to the competitive capital environment in developed economies.
Though it is clear the rest of the world is waking up to African tech and its potential, Hasson said it was probably not fully awake just yet.
“Most are still testing the water, with few making a solid or long-term commitment to the continent. This, however, is slowly changing, with more and more activity focusing on Africa with each year,” he said.