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Tech ecosystem in Lagos, other places worth $6bn – Report

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Lagos and four other African countries have a tech ecosystem worth $6 billion.

This was disclosed in ‘The Global Startup Ecosystem Report GSER 2021’ by Startup Genome and The Global Entrepreneurship Network. 

According to the report, the African technology ecosystem is worth $6.6bn.

The report said, “African ecosystems are collectively worth $6.6bn in value. Of that, $6bn is concentrated in the Top 5: Cape Town, Lagos, Johannesburg, Nairobi, and Accra.”

The report added that early-stage funding in African startup ecosystems has increased to $46.5m, double the amount from 2020. 

As per GSER, fintech dominates early-stage investment in Africa, with over $206m invested between January 2018 and June 2020. The report added that the exit value in Africa was over $1.1bn, with Cape Town, Johannesburg, and Durban ranking the highest.

According to the report, Kampala, Abuja, Abidjan, Durban, Kigali are the top regional challengers.

Chief Executive Officer, Tony Elumelu Foundation, Ifeyinwa Ugochukwu, said, “Although funding fell dramatically at the start of the pandemic, startups in 2020 raised $1.1bn in 319 VC deals, according to the African Private Equity and Venture Capital Association.

“That is a record and more than twice the number in 2019. According to data from BFA Global, the first half of 2021 looks even better, with startups raising $1.19bn. That is more than the first halves of the last two years combined.

“Yet scaleups remain in short supply here in Africa. Fewer than 20 companies are valued at $200 million or more, and Africa has just four unicorns, of which three are from fintech and the other from e-commerce.

“Foreign investors dominate funding for all four unicorns, a model pervasive throughout the continent.

“Foreign investment plays an outsize role in African startups, with more than 40 per cent of VC deals over five years originating in North America, according to AVCA.”

Founder and CEO of Startup Genome, JF Gauthier, said, “The democratisation of startups began before Covid. Now, with digitalisation greatly accelerated by the pandemic, geographic constraints are primarily gone.

“Among my most exciting, gratifying experiences has been watching the world map fill up with startup hotspots and welcoming new ecosystems onto our rankings and into our programmes.

“This year, we are creating continental sections to shine the spotlight on these emerging regions further.”

Founder and President, Global Entrepreneurship Network Jonathan Ortmans said, “Movement in the rankings of the Top 100 Emerging Ecosystems is evidence that these efforts are working.

“This report shows that the number of ecosystems generating over $4bn in ecosystem value has more than doubled in the past four years.”

It added that 91 ecosystems created at least one unicorn in 2020, with unicorns emerging for the first time in Mexico City, Montevideo (Uruguay), Dallas, Houston, Busan (South Korea), and Pune (India).

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