In Africa, the year 2021 has been a watershed moment for startups. And there are no signs of it slowing down. The IT industry, which has seen four startups reach the billion-dollar milestone in recent months, bringing the total to seven, boasts several of such. Emerging market investors are anticipating a flurry of new African unicorns in other technology-enabled fields as part of the exciting build-up.
As privately held, fast-growing startups, African unicorns are growing faster than ever before. Ian Lessem, Managing Director of HAVAIC thinks that the rise in African unicorns is due to the growing interest in the sectors from venture capital investors.
“Across the globe, the number of billion-dollar companies is rapidly growing as they deliver leading returns. Africa is rich with opportunities for investment in the startup ecosystem. Africa is a continent of born entrepreneurs solving a number of challenges that Africans are committed to addressing”
“When coupled with technology, ever-increasing addressable local and international markets, all buoyed by unprecedented amounts of investment, the future for the African tech sector has never been brighter”.
High mobile penetration rates, a tech-savvy young population, and technological breakthroughs are all fueling the creation of promising technology companies. Furthermore, the return of qualified human capital to Africa has produced the ideal melting pot of opportunity and capabilities, boosting the creation of technology-enabled firms.
The venture capital industry, which is bolstered by well-established accelerator programs, corporate innovation challenges, and a plethora of international and local investors, has also helped establish a solid foundation for promising startups.
Unicorns are a sign that a venture capital ecosystem can deliver scalable solutions and, as a result, provide superior returns on investment. The emergence of four unicorns, combined with a maturing startup sector, is a strong indicator that Africa is ready for and on track to produce many more billion-dollar companies in the years ahead.
