Startup Africa: Southern Africa’s Startup Ecosystem – An Overview

I’ve spent years dissecting the startup ecosystem, and my The Accelerator Conundrum blog series goes deep into why the traditional, cohort-based, equity-taking accelerator model is fundamentally flawed. In Southern Africa, a region with a burgeoning entrepreneurial spirit but an often-nascent support infrastructure, this conundrum is particularly acute. While countries like South Africa have a more mature ecosystem, many others in the region are still in the early stages, making the choice of a support system even more critical.

The Southern African startup scene, much like its counterparts elsewhere, often falls prey to the “demo day delusion.” This is the misguided belief that the goal of an accelerator is to prepare a company for a flashy pitch event, not to help it build a sustainable, revenue-generating business. This approach is rooted in the “Blitzscale from the get-go” philosophy—the idea that you must burn vast amounts of capital to acquire market share at all costs. For a region where a mature venture capital ecosystem is still developing, this is a dangerous and often fatal strategy.

The philosophical alternative is to “Bootstrap first, raise money later.” This is the core of my methodology. It prioritizes building a robust business using customer money, not investor money. You achieve product-market fit, generate revenue, and build a scalable business with a solid foundation. Only then do you consider fundraising, and you do so from a position of strength, not desperation. This approach is not only safer but far more effective for the vast majority of startups, especially in a capital-constrained environment.

This brings me to the perfect antidote for the Southern African ecosystem: the 1Mby1M global virtual accelerator.

Our program is a direct answer to the flaws of the traditional model. It is non-equity-taking, meaning you keep 100% of your company. In an ecosystem where funding can be hard to come by, your equity is your most valuable asset, and we believe you should protect it.

But the real power of 1Mby1M lies in its curriculum and accessibility. The 1Mby1M curriculum is a practical playbook for building a billion-dollar company, but it is tailored to help you get the foundational pieces right first. It’s a continuous, long-term program, not a three-month sprint. For those who are just starting, we offer free roundtables, which are a fantastic way to get an initial taste of our strategic guidance.

Our fully virtual model also solves the geographical bias of the traditional ecosystem. Whether you are in Gaborone, Lusaka, or Harare, you can access my world-class mentorship without having to relocate. And for those seeking a more private, scalable resource, our Digital Mind AI Mentor is a game-changer. It is built to be a confidential, 24/7 strategic companion. You can ask it any question, test out your ideas, and get instant feedback in a private setting. This offers a level of privacy and scalability that no physical mentor or traditional accelerator can match.

In short, the Southern African startup ecosystem has immense potential, but to unlock it, entrepreneurs must look beyond the outdated “Blitzscale” playbook. The future of entrepreneurship in this region lies in the hands of founders who are willing to bootstrap first, build a real business, and then, if necessary, raise money on their own terms. 1Mby1M provides the strategic guidance and global platform to do just that, without the cost or the conundrum.

Overview of Regional Ecosystems

South Africa has the most mature startup ecosystem in Southern Africa, with a strong network of over 490 tech startups as of May 2022. It has a significant investment landscape, having raised almost $1 billion in funding between 2015 and 2022. The fintech sector is particularly vibrant.

Beyond South Africa, several other Southern African nations have emerging, though less developed, startup ecosystems:

• Namibia is ranked second in Southern Africa for its startup ecosystem, with 48 startups as of a recent report. It has a secure and stable environment that promotes entrepreneurship, and its energy and environment sector is particularly strong. However, it faces challenges with a small population, lack of physical infrastructure, and limited funding.
• Zambia ranks third in the region with 28 startups. Its ecosystem has been gradually improving, with fintech and e-commerce being notable sectors. Challenges include a small number of startups and a lack of a clear investment funnel.
• Botswana is in the growth phase of its ecosystem, working to diversify its economy beyond diamond mining.While the government and various NGOs are pushing for entrepreneurship, the ecosystem lacks a cohesive capital stack and faces challenges with limited access to venture capital and a high-profile diaspora network.
• Zimbabwe is known for a resilient, “gritty” entrepreneurial spirit that has been shaped by the country’s challenging economic environment. The ecosystem is in its nascent stage, with an emphasis on survival capabilities over traditional growth models.
• Lesotho has a young startup scene and is not yet on the Global Startup Ecosystem Index. It has a few notable startups, but a key missing ingredient is venture capital funding, with most entrepreneurs relying on personal savings.
• Eswatini has a developing startup ecosystem with a focus on addressing youth unemployment. It has an Entrepreneurship Policy Lab to help create a supportive environment for small and medium-sized enterprises (SMEs).
• Angola‘s startup ecosystem is in its infancy but shows promise. The government is taking steps to improve the tech infrastructure and combat bureaucracy, and organizations like Acelera Angola are supporting tech startups.
• Malawi has a nascent entrepreneurship ecosystem with a young population and growing support from NGOs. Its key sectors include agriculture, ICT, and renewable energy, though it faces challenges with limited infrastructure and a shortage of professional skills.
• Mozambique also has an emerging startup ecosystem, particularly in urban centers like Maputo. The government is beginning to recognize the importance of entrepreneurship, and a young population provides potential, though challenges remain with limited funding and infrastructure.
• The Comoros, a small island nation, has a nascent ecosystem driven by its unique geographical location and a focus on agriculture and tourism. It faces significant challenges with underdeveloped infrastructure, limited access to funding, and a small talent pool.

We will look at more depth into South Africa and Namibia next.

Photo Credit: Wolfgang Weiser from Pixabay

This segment is a part in the series : Startup Africa