Western Cape startup and investor community the Silicon Cape Initiative is not trying to be the “Silicon Valley” of Africa and must instead play to its own strengths as it looks to become a regional hub, according to outgoing chairperson Alexandra Fraser.
Founded in 2009 by investor Justin Stanford and entrepreneur Vinny Lingham, the Silicon cape Initiative last month raised more than ZAR3 million (US$270,000) in funding from South Africa’s First National Bank (FNB).
Fraser told Disrupt Africa FNB – which, in alliance with Edge Growth, runs the ZAR186 million (US$16.8 million) Vumela Enterprise Development Fund – was a natural partner given the long-term relationship between the two entities, and said the money would be used to hire full-time staff and expand certain operations.
“We’ve had a very good relationship with FNB for a long time which certainly helped when we considered going out to raise funding on a more concerted effort,” she said. “We knew that if we had to pick a partner from South African corporations that had a match of ideals with Silicon Cape then FNB was our number one choice.”
She said though some people might say it took a while for Silicon Cape to get to the point of professionalising its operations, the last five years had been spent learning about the specific needs of the ecosystem.
“Some people might say that it has taken a long time to get to this point, but when we started Silicon Cape we didn’t really know who our community and market was,” she said. “Now it’s about saying “how do we address the broad community’s needs?”.”
Fraser said those needs would not be addressed simply by copying what has happened elsewhere, notably in the United States (US).
“We’re not ever going to be the Silicon Valley of Africa, we’re going to be our own ecosystem, play to our own strengths,” she said.
“The potential for us to be a major hub in Africa is certainly there, it is about how do we strengthen all of the hubs because we need a network for entrepreneurs to navigate across and expand businesses.”
She said Silicon Cape was looking to partner with other hubs across Africa.
“It is quite tricky, it is still early days. To build a vibrant tech sector is not going to happen overnight. To build this ecosystem is going to take 20 years minimum,” she said.
“Funding startups is not instant pudding. Every business is different, and that then dictates how much funding that business will raise. What we have to do is unlock all the funding so that when a company does want to raise a large amount they are able to do so.”
The initiative, Fraser told Disrupt Africa, is very aware of the challenges it faces in terms of regulations, exchange controls and diversity, and was intent on tackling them.
“We need to keep working on multiple of these challenges at the same time.”