In the high technology industry, it seems that investors and consumers alike are always on the lookout for the next boomtown or country. While much of the growth of global tech still comes from Silicon Valley, things are changing fast. London has come into the spotlight as one of the global epicenters of tech.
Meanwhile, US hubs such as Miami and Austin look set to steal the crown from California at any moment. Beyond these places, the likes of Singapore, Tallinn, and Dubai have all been touted as the latest stables for the tech unicorns of tomorrow.
But what about Africa? As the continent continues to capture an ever-larger share of the global economy, it is worth looking to see which country could stand out as the tech hub of tomorrow. Based on current trends, it seems that South Africa could be the one to go for gold. Here are some facts you need to know about South African tech that might convince you to think the same.
ZA has a Silicon Valley of its own
Did you know that South Africa is home to its very own Silicon Valley, one that is the largest tech cluster of its kind on the continent by a pretty wide margin? In the stunning Oceanside metropolis of Cape Town, you’ll find the Silicon Cape, a rapidly growing corridor of tech unicorns and venture capital firms that represents the cream of the crop within the country’s high-tech industry.
In this small stretch of the city, equivalent to a few square blocks, you’ll find over 450 tech firms in operation, which employ more than 40,000 people in total. Of the startups clustered in the Silicon Cape, more than $88 million in seed funding was awarded to them in 2020 – not too shabby you can read more about it at businesstech.co.za.
EdTech is big
There are many strong sectors within South Africa’s burgeoning tech scene, but it is possible that ed-tech is the most promising of them all. South Africa collected the lion’s share of all ed-tech startup funding last year, with domestic firms attracting more than $50 million in funds (Nigeria, the second-best entry in the ed-tech rankings, attracted only $11 million in funding).
This is partly due to the dense concentration of world-leading universities in the country, as well as innovative education policies that have been copied around the world.
There are some truly stellar South African companies currently operating in the ed-tech space, with the most famous examples worldwide probably being The Student Hub (founded in Cape Town) and Hyperion (founded in Durban), the programming skills platform that has been given investment by Google and Facebook.
FinTech is making waves, too
While ed-tech is hogging the limelight right now, fin-tech is catching up in a big way. This is partly due to a small number of firms that have gone on to attract mammoth amounts of investment and attain international success.
The most obvious example here is Jumo, the AI-powered banking-as-a-service platform that recently received a whopping $120 million in funding, with the likes of Visa, Fidelity, and Kingsway chipping in. More locally, there is the innovative digital payment platform EasyEFT, which allows anyone in South Africa to make online payments from their bank account without having to share their bank details with a website.
This has proven to be especially useful within South Africa’s burgeoning online casino industry, where users often have to make multiple payments to make deposits in online casinos. In fact, the expert review site for South Africa’s online gambling platforms, casinos.co.za, specifically recommends sites that offer EasyEFT, simply because it is so popular among local users. This kind of market dominance is emblematic of South Africa’s rising fin-tech success.
A positive future outlook
It’s worth concluding with the fact that, as things stand, the future is looking pretty bright for South African tech. The country attracts more than a fifth of all VC funding on the continent in 2019, and that share looks set to increase in the years ahead. Meanwhile, 50% of all tech sector growth in Africa over the next decade has been predicted to occur in just five countries, with South Africa joining the ranks of Egypt, Kenya, Morocco, and Nigeria.
If you’re looking for the next tech boomtown, it could very well be South Africa. Watch this space to see what happens.