| Tech Start Ups |    1864 VIEWS  |
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Wednesday, November 11, 2020 / 05:19 PM / By Google Africa and IFC / Header Image Credit: Google Africa and IFC
The African Internet economy is one of the largest
overlooked investment opportunities of the past decade with potential for
profound impact on development. The mobile Internet is transforming life across
the continent with the support of growing local connectivity and mobility and a
dynamic, young urban population. With a potential to add up to $180 billion to
Africa's gross domestic product (GDP) by 2025, depending on the usage intensity
of digital technologies by businesses, the Internet economy is improving
productivity and efficiencies across large swaths of the economy, including
agriculture, education, financial services, healthcare, and supply chains.
The Internet economy's potential to play a pivotal
part in Africa's GDP growth has led to burgeoning investor interest. Buttressed
by increasingly large liquidity events in African technology, even in the wake
of the pandemic, venture capital funding in Africa reached an all-time high in
2019. There are signs that African venture capital funding is continuing its
forward momentum, despite near-term disruption caused by COVID-19. The total
amount of invested venture capital is still a fraction of total global venture
capital funding, especially relative to the size of Africa's population, but
this gap presents potential first-mover advantages for investors.
The COVID-19 pandemic has demonstrated that digital
startups in Africa are able to provide innovative solutions when they are
needed most. For example, public sector partnerships with private healthcare
startups are increasing the availability of testing and have expanded the
capacity for medical recordkeeping. The continued operation of the informal
sector - a major portion of Africa's economic activity - is supported by
e-Logistics and e-Commerce supply chain startups. New partnerships and business
models like these will likely continue to influence startups across all
industry sectors, even beyond the COVID-19 pandemic.
Africa has the world's youngest, fastest-growing, and
increasingly urbanized workforce. These demographics, coupled with improved
longevity and education levels, have led to a rise in the consumption of online
services. Additionally, heavily concentrated populations in Africa's cities are
supporting developer communities that attract new investors and talent pools.
Rural populations also benefit from digital startups, and the Internet economy
is critical to reaching and supporting the continent's 1.3 billion people.
The African Internet opportunity is driven by the
talent of young digital entrepreneurs. Startups are solving some of Africa's
most challenging issues, such as access to healthcare for remote populations,
employment opportunities for women, and the ability to securely send and
receive money. Advanced technologies-tailored to data-driven, scalable, and
pan-African approaches-are providing new ways for Africans to conduct business
and earn income. A robust collaboration between the private and public sectors
is imperative to ensuring that African entrepreneurs succeed, not only in their
home countries and regions, but in the global marketplace. Startups, and the
entrepreneurs who create them, are the future of the continent.
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