AfricArena Founder, Christophe Viarnaud says: “Over the past few months we have been traveling to the 10 top tech hubs in Africa to find the best startups and went to Tokyo, San Francisco, New York and Vivatech in Paris to showcase the key success stories. We have seen that there has been an evolution in the perception of Africa and specifically tech in Africa, which is seen to be the next big thing. We decided to host these last two events in South Africa as part of the AfricaArena Tour to provide local startups with a platform. We want to help grow the next generation of African entrepreneurs and advocate for more support in Africa."
Both events kicked off with panel discussions about the tech startup ecosystem as well as the trends and dynamics affecting African startups, specifically those in South Africa. Panellists participating in the Cape Town leg of the Tour included Abraham Cambridge, Founder and CEO of The Sun Exchange; Danai Musandu, Investment Associate at Goodwell Investments; Karabo Nkoana, Investment Associate at the SA SME Fund and Guillaume ‘G’ De Smedt, Global Community Director for Startup Grind. The Johannesburg panel was comprised of Clive Butkow, CEO of Kalon Venture Partners; Courtney Bentley, CEO of Visibiliti Insights; Karabo Nkoana Investment Associate at the SA SME Fund and Kwena Mabotja, Sub-Sahara Africa Director at SAP Next Gen.
Among the numerous insights that emerged from the discussions was the fact that 95% of African startups are either underfunded or not funded at all as investment continues to concentrate on mature Series A and above startups. This is the number one issue that AfricArena aims to address. On the topic, Bentley said: “Although there are certain corporate businesses that say they are really innovative and that they are investing in the future, they are not investing in the smaller startups that they deem to be too high risk. That is a fundamental problem that South African corporates have to get over because, in my opinion, the ones that do invest in startups will outpace those that don’t.”
A trend pointed out by Musandu at the Cape Town event was that of local tech startups, particularly those in Cape Town, producing solutions that aren’t geared towards serving the mass population, but rather the 1%, given that many of these companies are focused on global scale ups. She shared: “In other African cities, we are seeing a lot of activity and interesting solutions that speak directly to the people who need them, which is what primarily interests us as impact investors.” This might be one of the reason why, in 2018, Nigeria and Kenya overtook South Africa for the first time as the primary country for attracting investment in tech startups.
Looking at the Gauteng ecosystem Butkow revealed: “Research has been done recently where, for the first time, more venture capital funding is flowing into Gauteng companies than those in the Western Cape. I don’t think we are giving ourselves enough credit for what we’ve got here, but I do think that we have a lot of work to do to make Gauteng like the Silicon Cape. We need to work harder to drive this ecosystem and put us on the map.”
The panel discussions were followed by the nail-biting pitches delivered by startups who had three minutes in which to sell their solution to the judging panels. In Cape Town, 12 startups put forward their products in response to three challenges – the SA SME Challenge, the Old Mutual Challenge, and the Engie Challenge, while in Johannesburg another 12 presented solutions to five challenges - the SA SME Challenge, the Old Mutual Challenge, the Sanofi Mental Illness Challenge, the Sanofi Diabetes Challenge and the Fantom Foundation Blockchain Challenge. The solutions ranged from pay-as-you-go gas for cooking, a web platform that automates the licencing process and virtual actuaries, to a companion platform for healthcare professionals, an app for student support and insurance built on the stokvel concept.
The two South African startups winning the ecosystem challenges and go through to the AfricArena Summit were BONANG. ai from Cape Town and Khula from Johannesburg. BONANG. ai offers end-to-end digitisation of the motor vehicle insurance customer experience, giving insurance an IoT edge. Khula is a marketplace app for emerging farmers that not only connects them with buyers, but also enables them to have their products delivered easily, every time, through a shared cold chain.
“We are very proud to be a part of telling the narrative of African tech entrepreneurship through this next generation of entrepreneurs and wish them all the best as they continue to disrupt the local ecosystem,” concludes Viarnaud.