Global Opportunities in the “Silicon Cape”
Often referred to as the “Digital Gateway to Africa”, Cape Town is a booming start-up ecosystem, which is increasingly attracting the attention of global entrepreneurs and investors alike. Far from just a tourist destination, the city boasts a thriving cluster of tech-enabled startups with a focus on solving unique local challenges. However, the opportunities are not limited to local entrepreneurs; the potential for global scale-ups and partnerships is vast, with many international start-ups choosing Cape Town for the following seven reasons:
1. Many startups already do
Cape Town is the number one ranked African tech ecosystem, with an established hub of globally-focused tech businesses and entrepreneurs. 60% of South Africa’s tech start-ups are based in the Cape, with many boasting impressive success stories. The 7 largest sectors in the tech start-up industry include business application, communication, mobile, advertising, consumer online, search, and payment, with abundant opportunities for collaboration and consolidation.
2. World-class financial markets
The business environment in South Africa is becoming increasingly attractive for local and international entrepreneurs. The country is ranked first in the world for its strength of auditing and reporting standards, and in financing through the local equity market. Its professional services and financial markets are world-class, ranked second in financial services meeting business needs and soundness of banks by the World Economic Forum. It is therefore not surprising that some of the best local and international financial services, audit, law and consulting firms have established offices in Cape Town.
3. Extensive startup support network
Cape Town’s innovation culture is supported by its small business development structures and innovation programmes. The city is home to Africa’s oldest tech incubator, which has incubated 750+ businesses and supported 2000+ of entrepreneurs through its programmes. In addition, there are over 20 acceleration programs and more than 25 co-working spaces in the ecosystem, and there is widespread public and private support for sector research and direct investment.
4. Investment opportunities exist
The growing ecosystem has attracted the attention of local and global investors alike. 59% of South Africa’s VCs are headquartered in Cape Town, and 75% of VC deals have been concluded in the city, with an average ROI for of 20% per annum between 2013 and 2015.
5. Globally competitive universities and talent
Cape Town is a hub for creativity and talent. In a 50km radius there are 4 world class universities, 2 globally recognised business schools, research councils and numerous private and public technical colleges. Over 500 coders are trained per year and software engineers and developers are 40-80% less expensive than developed markets.
6. Excellent IT Infrastructure
Cape Town is one of the most important IT hubs on the continent, with one of the largest open access fibre optic networks and the highest number of successful IT companies in Africa. Moreover, the increasing adoption of broadband and mobile internet penetration is increasing retail demand, and creating vast market opportunities for IT vendors and services across sectors.
7. Potential to impact
Cape Town, and the broader African continent, face unique challenges that require innovative and low-cost solutions. Companies are starting to recognise the trend of ‘trickle-up innovation’, where ideas accelerate in emerging markets and later scale-up to the West. The lean business models of these start-ups allow them to outcompete existing players, and provide affordable solutions to consumers across emerging markets. With abundant local challenges and access to other Africa countries, Cape Town offers an incredible opportunity to impact consumers and gain rapid market share.
With the talent, support structures, investment environment and lifestyle, it is not surprising that startups are choosing Cape Town as their home. As the ecosystem continues to grow and attract global recognition, tech start-ups should consider skipping Silicon Valley, and scale to the Silicon Cape instead!
Written by Nicole Dunn
Data sourced from Silicon Cape and the World Economic Forum
All Our latest posts
Between 5-9 October 2020, the Kingdom of the Netherlands partnered with The Hague Institute of Innovation and Law (Hiil) and held a #BarcampforJustice to find technology-based solutions to the scourge of gender-based violence in South Africa. It was an exciting week of ideation, co-creation and sleepless nights with teams trying to come up with winning solutions. We would like to congratulate the winners – Guardian Gabriel and CASA. Guardian Gabriel […]Read More
The Kingdom of the Netherlands believes that we can co-create pioneering digital solutions to local challenges by facilitating innovative partnerships. Read more on the companies below and click on the logos to visit their website.Read More
[9 July 2020]. The Dutch government has teamed up with local online retailer Yebo Fresh, as well as Netherlands-based Run4Schools, a foundation that finances and organises in-school and after-school sports care in the townships of South Africa, to help families in need in the Mitchells Plain area. With donations of 530 food parcels to be delivered, this is a contribution to relieve many people who have been struggling to cope as […]Read More
The Netherlands in South Africa in partnership with the House of Le Cap, draws attention to the importance of equal rights for LGBTI people this year on 17 May, in celebration of the International Day Against Homophobia, Transphobia and Biphobia (IDAHOT). Each year we commemorate International Day Against Homophobia with a collaboration event and this year is no different. We are having a quarantine ball! The Quarantine Ball will be […]Read More
CALL FOR APPLICATIONS Participate in the pilot of The Water Hub accelerator programme: Western Cape, South Africa Check out the application form here The Water Hub invites Dutch water technology companies to apply to participate in the pilot of the Water Hub accelerator programme. If you have cost-effective, innovative solutions that fit into one or more of the categories below, please apply by 30 September 2020: Water pressure management systems […]Read More
After two intense days of workshops and plenaries, our track facilitators share their feedbackRead More
CAPE TOWN (30 January 2020). This year’s #cocreateDESIGN FESTIVAL will gather at the vibrant Guga S’thebe Cultural Centre on 24 and 25 February 2020. The event will host two days of inspiring speakers, practical workshops, Oxford-style debates and networking receptions. This year’s theme, “Towards Digital Inclusion” will focus on the fourth industrial revolution (4IR) and its impact on the creative industry. The event is hosted by The Kingdom of the […]Read More
This morning Consul General swapped four wheels for two and joined the #RedSocksFriday with the passionate cycling community of Cape Town. “We’re trying to encourage people to ride in the city.” – Sindile Mavundla, Program Lead at TSIBA Business and Founder of Khaltsha Cycles “We need to build the relationship between motorists and cyclists so riding through the middle of the city now in the middle of the day, motorists […]Read More
CAPE TOWN [30 October 2019]. The diplomatic missions of the Netherlands in South Africa will be hosting their biennial flagship project #cocreateMYCITY in Cape Town in November 2019. The initiative will bring together South African and Dutch stakeholders to discuss ways to co-create economically, environmentally and socially Resilient Cities, focusing on sustainable and innovative solutions to urban challenges. Dutch Vice Minister of Foreign Economic Relations, Hanneke J.W. Schuiling, and the […]Read More
CAPE TOWN (2 September 2019). Dutch and South African (SA) poets and spoken word artists use words to build bridges at the fourth edition of #cocreatePOETICA at the Open Book Festival. This year, the programme will welcome award-winning Dutch poets Radna Fabias and Simone Atangana Bekono, who will join SA poets in workshops, performances and themed discussions between 4 – 8 September 2019. #cocreatePOETICA is a collaboration between Open Book […]Read More