It was the year when African tech startup funding passed the $2 billion mark, according to an article on Disrupt Africa. 564 tech startups acquired more than $ 2.1 billion worth of funding last year. 2021 was a landmark year for the African startup sector.
Founders of the fastest-growing tech startups, such as Chipper Cash, TymeBank, Safeboda, Kippa, etc., are well into their second and third-round fundings.
2022 witnessed them reaching new heights in terms of business performance & profitability and acquiring continual venture capital investments.
However, there’s a lot of scope for further improvement. There are certain key factors that, when addressed, can boost start-up growth even further.
Here’s a sneak peek into the most prominent ones among them all.
Boosting Start-up Growth in Africa: Top 3 Recommendations
Africa is very much on its way to becoming a startup behemoth. Its fintech scene is progressing rapidly, both native investors and foreign venture capital firms are pouring in money, and innovative entrepreneurs are coming up at a vast rate.
More needs to be done by governments & policymakers to accelerate the growth of fast-expanding businesses & incubate the up & coming ones. Here are 3 significant expert recommendations.
- Closing Funding Gaps
Despite acquiring substantially significant startup business funding in 2021, the level of investments in African tech startups is significantly low compared to the rest of the world.
Governments, policymakers, and business forums need to take note & determine new pathways of startup funding to boost startup growth.
Resources should be in place that keeps startups well informed of all principles, processes, and changes. Tech itself can be an answer to such an information gap.
Policies are also a significant reason behind major funding troubles. Policies that nurture a business-friendly economic environment are the need of the hour. Besides the information gap, there are gaps and flaws in the existing system.
Attracting varied funding sources is another potential factor that can bridge these gaps faster.
- Developing a Conducive Business Environment
Adverse policies, immense costs, convoluted regulations & processes, fluctuating markets, economic instability & barriers, and political upheaval are numerous challenges Africa’s rising tech startup industry has to contend with.
Governments must take the initiative. Governments need to work with entrepreneurs to develop low-risk environments, set up sandboxes for business incubation, offer accessible & affordable upskilling opportunities, and improve infrastructure.
- A Flourishing Tech Ecosystem
Properly developed tech ecosystems boost business growth and attract investors. Better information exchange and improved tech infrastructure can help startups connect with venture capitalists, skilled professionals, tech hubs & universities, and the like.
Recruiting new talent, identifying business opportunities, and improving operations are guaranteed when you have a thriving tech ecosystem.
Proper tech infrastructure is key to connecting with & applying for startup funding. It brings business and venture capital firms together, bridging gaps & improving communication and coordination.
Blaq Ventures is a prominent startup funding firm that has been at the forefront of boosting tech start-up growth in Arica.
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