Africa’s newest startup hubs are expanding beyond its legacy tech markets

Software developers work at the iDEA hub in the Yaba district of Lagos
Software developers work at the iDEA hub in the Yaba district of Lagos
Image: Reuters/Akintunde Akinleye
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Almost 130 tech hubs have opened across Africa in under two years, showcasing a maturing entrepreneurial ecosystem and a rising interest in the potential of local markets.

A total of 442 active incubators, accelerators, and co-working spaces were recorded on the continent as of early March by the global telecoms industry body GSM Association. That’s a jump from 2016 numbers, which showed 314 spaces designed to support tech startups.

The increase in hubs was mostly boosted by the opening of locales in countries like Senegal, Ghana, and Côte d’Ivoire, with the latter two doubling their number of centers. Zimbabwe, long starved of venture funding given its struggling economy, had 13 hubs as of March, while Uganda added three more tech incubators to the 12 recorded in 2016. Nigeria experienced the highest growth of all African nations, increasing its hubs to 55 in 2018 from 23 in 2016. Almost half of all the hubs were concentrated in just five countries.

In the last five years, increased smartphone adoption, lower internet costs, and the immense size of the African market has drawn several high-profile investors and tech giants into Africa. In 2017, venture capital funding reached $560 million, a 53% year-on-year growth. Prominent tech leaders including Facebook’s Mark Zuckerberg, Jack Ma of Alibaba, and Google’s Sundar Pichai have also visited tech hubs across the continent in the past two years, launching products and looking for new opportunities.

Just this week, Google announced the first set of 12 startups that will participate in its Launchpad Accelerator Africa class, modeled after the global program in Silicon Valley. Last year, Facebook said it will open a tech hub in Lagos to help train more techies and drive innovation. Mobile operators like MTN and financial institutions like Barclays have also helped establish innovation incubations in Abidjan (Y’ello Startup) and Cape Town (Rise) respectively. Investors are also widening their scope beyond just the traditional markets into the Francophone nations of Cameroon and Senegal.

Tech hubs are also sprouting outside capital cities. This is evident in Kenya, where prominent spaces have been established beyond Nairobi, in Mombasa, Voi, and Machakos. The same is true of Nigeria, where Aba city in the southeast has become home to a budding tech industry.

Maxime Bayen, the senior insights manager for GSMA’s accelerator program, said the landscape for tech start-ups is showing “a range of positive signs.” Key among them, he says, is that “most leading tech hubs have, on average, half a decade of activity and have therefore been able to test and pivot several strategies and models.”