Global venture capital (VC) and private equity investors are banking on an African tech boom over the next three years, reveals a new study.
The research, commissioned by blockchain-based mobile network operator World Mobile, and conducted by independent research company PureProfile, indicates the continent’s start-up ecosystem is expanding rapidly.
For the research, PureProfile interviewed 100 senior private equity and VC executives based in the US, UK, Saudi Arabia, United Arab Emirates, France, Germany, Hong Kong and Singapore in June.
It found that nearly six out of 10 (59%) predict 50% or more growth in the tech sector in three years, with one in five (18%) expecting the sector to expand by 75% or more during the period.
The respondents pointed to improvements in the business environment in Africa as the key driver of this growth, according to the research.
“More than half (54%) of those questioned believe the business environment on the continent is improving, while 41% point to greater geopolitical stability and 36% say the ongoing expansion of internet connectivity will support a tech boom.
“More than half (55%) believe that will lead to Africa becoming a tech superpower within 10 years, while 39% believe the continent will achieve that status within 10 to 20 years.”
Sarah Dusek, investor and founder of investment fund Enygma Ventures, expressed similar sentiment about the continent earlier this month, saying she believes Africa has a real opportunity for growth over the next decade, and particularly so in 20 years.
In addition, investment in African tech start-ups in 2021 was unprecedented, reaching $1.6 billion (R25.5 billion) in total – a 113% increase from 2020, according to Start-up Genome’s Global Start-up Ecosystem Report 2022.
Micky Watkins, CEO of World Mobile, comments: “Technology is a key area for start-ups and there is increased confidence in rapid growth with a majority of investors expecting a 50% increase in just three years. Governments on the continent are focused on supporting private businesses, and political stability is also important.
“But the importance of internet connectivity is growing, particularly for areas where delivering affordable and reliable connectivity remains an issue. This will enable more people to access the opportunities that internet connectivity creates.”
World Mobile is one of the companies seeking a solution to bring widespread internet connectivity to Sub-Saharan Africa. The operator will soon launch a hybrid mobile network in Zanzibar, delivering connectivity supported by low-altitude platform balloons.