Africa is in the midst of a technological boom, attracting increasing attention from investors and entrepreneurs worldwide. This continent, rich in opportunities and innovation, offers fertile ground for those looking to establish themselves in growing markets. This article is taken from a round table organized at BIG10.

Exceptional Economic and Demographic Growth

Africa is often viewed through the lens of poverty, conflict, and instability. However, this reductive vision masks a much more dynamic and promising reality. As highlighted by Elisabeth Moreno, Chair of the Board, the African continent is experiencing exceptional
economic and demographic growth. Venture capital investments have risen from less than 400 million euros in 2015 to nearly 5 billion euros in 2022, an annual growth rate of 45%. This spectacular progression demonstrates Africa’s growing appeal to investors.

With its 1.4 billion inhabitants and a median age of 19, Africa represents a vast and young market. By 2050, the UN predicts the continent will have 2.5 billion inhabitants, or one in three people on Earth. This demographic dynamic is accompanied by robust economic growth, with average growth rates of 3.2% to 3.5%, and countries like Côte d’Ivoire, Benin, and Senegal showing rates of 6%.

Africa Chooses Startups

Vincent Prévy, a technology and investment expert currently at Partech, explained that often, it is not the startups that choose Africa, but Africa that chooses the startups. For example, companies like Frecha, which develops solutions for beauty salons, discovered they had hundreds of clients in South Africa without having a local sales force. This reality is facilitated by digital distribution and the presence of African diaspora members in leadership teams, who play a crucial role in expansion on the continent.

The Importance of Local Partnerships

To succeed in Africa, it is essential to forge strong local partnerships. Elisabeth Moreno emphasized the importance of working with actors based on the continent to navigate local specifics and avoid pitfalls. Ring Capital, for example, partnered with M-Studio to benefit from their local expertise and ensure the success of the startups they support. Partnerships must be balanced, with an equitable distribution of the created value.

Vincent Prévy added that the legal formula of the partnership must be adapted to the local context. He stressed that startups should avoid capturing most of the value at the expense of their local partners. Startups must also adapt their strategy based on the targeted countries, considering the particularities of each market.

Opportunities in Various Sectors

Africa is not limited to fintech. Yacine Saifi, a partner at Afrique Invest, highlighted the diversity of sectors in which African startups operate. For example, a precision agriculture company in Southern Africa is making remarkable advances in South Africa and is now expanding into Europe. Similarly, a French startup in education, a leader in coding schools, trained 7,500 African students last year. Opportunity sectors also include mobility, logistics, artificial intelligence, and climate.

Challenges and Solutions

Entrepreneurship in Africa presents unique challenges, including administrative delays and difficulties related to the local environment. Rodney Fautzing, a Cameroonian entrepreneur, shared his experience of the obstacles encountered when setting up his cassava flour processing project. However, these challenges can be overcome through strong local partnerships and a deep understanding of market specifics. Elisabeth Moreno emphasized the importance of humility and collaboration with local experts to succeed.

A Favorable Environment for Innovation and Entrepreneurship

African tech represents a tremendous opportunity for French investors and entrepreneurs. The continent’s demographic and economic growth, combined with the importance of local partnerships and the complementarities between Europe and Africa, creates a favorable environment for innovation and entrepreneurship. It is time for French investors and entrepreneurs to seize these opportunities and contribute to the development of African tech.

Access the replay: https://youtu.be/Btn-24KwuUk?feature=shared