Africa’s startup scene has been gaining momentum in recent years, and in 2023, several cities on the continent are emerging as vibrant hubs for innovation and entrepreneurship.
These cities are not only attracting local talent but are also becoming increasingly appealing to international investors. Based on The Global Startup Ecosystem Report 2023 (GSER 2023), these cities have shown remarkable achievements in funding, deal count, and sector-specific advancements.
Here are five African cities that are at the forefront of the continent’s startup ecosystems.
Nairobi, the capital city of Kenya, is the main hub for startups and entrepreneurship in the country. It hosts a significant number of co-working spaces, incubators, and accelerators that support early-stage ventures. The city’s vibrant ecosystem attracts entrepreneurs, investors, and talent from across the region.
Nairobi has established itself as a leading tech innovation hub in sub-Saharan Africa. The city’s thriving fintech ecosystem stands out, representing 41 percent of total technology startup deals from 2018 to 2022.
While access to funding remains a challenge for many startups, there has been a gradual increase in the availability of venture capital and angel investors. Several local and international venture capital firms have started showing interest in funding promising Kenyan startups, leading to increased investment opportunities.
Lagos, Nigeria’s economic powerhouse, continues to play a significant role in the region’s tech startup landscape. The city’s notable achievements in funding and valuation have earned it a place among the emerging ecosystems.
A significant catalyst for the growing tech startup ecosystem in Lagos is the robust tax administration and tailor-made incentives offered by the Nigeria Startup Act 2022. The act provides startups with a four-year tax exemption and additional tax relief amounting to five percent of taxable profits for up to five years for qualifying startups.
Financial technology companies like OPay, Branch, Flutterwave, and Glovo have already witnessed remarkable financial success in Nigeria, especially in Lagos. The GSER 2023 report urges startups to view these success stories as motivation and consider Lagos not just as a city to call home but also as a promising hub for their ventures.
Cape Town, South Africa
Cape Town has emerged as a promising player in the African startup ecosystem, making it in the top 100 emerging ecosystems. The city saw a 23 percent increase in ecosystem value and a 26 percent growth in early-stage deals.
With the introduction of 22 new life sciences disciplines, Cape Town’s startup landscape has diversified. Its scenic backdrop, supportive entrepreneurial ecosystem, and access to resources create a thriving environment for startups.
Johannesburg, South Africa
Johannesburg, the economic hub of South Africa, hosts a dynamic startup ecosystem driven by innovation and growth. The city offers a favourable investment climate, a skilled workforce, and a vibrant entrepreneurial culture. Fintech, e-commerce, and health tech are among the sectors driving Johannesburg’s startup scene. The city provides the support and resources needed for startups to scale and attract funding, making it an attractive destination for entrepreneurs and investors.
Accra, the capital city of Ghana, is steadily establishing itself as a burgeoning tech hub in West Africa. The city has seen a rise in startups, particularly in fintech, agritech, and e-commerce sectors.
Government initiatives promoting entrepreneurship and innovation, along with increased access to funding and resources, contribute to Accra’s growing startup ecosystem. With a favourable business environment and a vibrant community of entrepreneurs, Accra presents exciting opportunities for startups aiming to make an impact in Africa.