Unlocking Growth in Africa’s Tech Startup Ecosystem

The Opportunity and the Current Reality

Current reality of Africa’s tech startup ecosystem

Africa’s tech start-up ecosystem has expanded significantly in recent years. According to the International Trade Centre (ITC), as of 2024 there are more than 1,000 identified tech hubs across the continent, with Nigeria, South Africa, and Kenya hosting the largest share. This growth is reflected in funding trends: during the first half of 2025, African start-ups raised US$1.42 billion across more than 150 deals, representing a 78 percent increase compared to the same period in 2024.

These developments are particularly significant given Africa’s demographic advantage as home to the world’s largest youth population and a median age roughly half that of the United States. The growing number of hubs has strengthened local access to support, talent, and entrepreneurial activity, helping to build vibrant ecosystems in cities across the continent.

At the same time, there are opportunities to further strengthen how capital is mobilized and deployed across the ecosystem. Africa continues to attract a relatively small share of global venture capital flows, and where funding is available, founders may encounter valuation adjustments linked to perceived locational risks and local market conditions. Expanding exit pathways and strengthening capital markets could support more consistent scaling and reduce the need for off-continent incorporation.

As the ecosystem matures, there is also scope to improve coordination across the continent’s many hubs. While diversity remains a core strength, greater connectivity could help deepen early-stage funding and advisory expertise available to founders and investors. Currently, it is estimated that only around a quarter of African start-ups have participated in formal acceleration or incubation programmes, and experiences of support can vary in quality and impact.

Improving coordination could also help address structural factors such as regulatory complexity and visa constraints, which influence the mobility of talent across borders. Enhancing intra-continental talent movement would support ecosystem resilience and help retain value within the continent, particularly as a significant share of Africa’s professional developer community currently works with companies operating outside the continent.

Many experienced founders describe a fast-growing, multi-billion-dollar sector that has emerged with strong momentum. Building on this foundation by strengthening infrastructure, coordination, and policy alignment offers an opportunity to sustain growth and support long-term, inclusive development across Africa’s start-up ecosystem.

Why Does a Networked, Continent-Level Approach Matters?

To scale and endure, Africa’s tech startup sector can benefit  from both physical and systemic infrastructure supported by coherent and enabling policy frameworks. These policies should  reflect the distributed, dynamic nature of the sector and the scale of the opportunity it presents.

Africa is not homogenous. National and sub-national interventions remain essential, but on their own may be insufficient to address areas for further strengthening structural challenges or unlock shared cross-border opportunities. Successful African tech ventures are often grounded in local realities, which underscores the importance of approaches that are locally informed, highlighting the limitations of imported models.

The African Union’s Digital Transformation Strategy aligns with this thinking. More agile and foundational approaches are required. A networked ecosystem—convened and coordinated at national level but implemented primarily at sub-national level—could strengthen local ecosystems while enabling continental integration.

Above these national ecosystems, a distributed continent-level network, effectively structured and curated, could provide the benefits of agglomeration and access to deep pools of expertise and resources throughout the startup lifecycle. Such a model could promote more equitable origination and scaling, while organically addressing many of the structural barriers currently limiting growth.

For countries with relatively established ecosystems—such as South Africa, Kenya, Nigeria, and Egypt—and for cities including Cape Town, Johannesburg, and Gauteng, a formalized networked structure offers significant leverage. Strengthening proximity networks could further  support knowledge exchange, specialization, and operating efficiency.

Role of Key Actors

Given its leadership role and position as a former G20 host, South Africa is well placed to convene  and support this dialogue. Strong national hubs, alignment with regional policy priorities, and demonstrated capabilities in digital entrepreneurship and innovation enable South Africa to play a facilitative role in advancing this agenda.

A coordinated effort to map existing capabilities, identify gaps, and initiate cross-border cooperation pilots could provide an  appropriate starting point. Regional organizations and continental bodies, including the African Union and the AfCFTA Secretariat, have important enabling roles to play.

What Should be the Next Steps? 

The potential responses are available, and the sector has both the capacity and willingness to explore, refine, and adopt them. South Africa, as the first African host of the G20 and B20 2025 and as one of the leading nations in the African tech startup sector, is uniquely positioned to initiate a solution that is effective in the short term and sustainable over the long term.

By 2030, more than half of all new entrants to the global working-age labour force will originate from sub-Saharan Africa. Collective vision and leadership can help to ensure the continent’s tech startup sector is positioned to fully capitalize on this opportunity.