In 80 years, the world's population will exceed 10 billion, by which time one in two people will be African, and half of the world's top 10 largest cities will be in Africa. Currently, Africa's GDP is half that of Japan, but urban expansion and its population pyramid make it clear that it will continue to grow. If the AfCFTA brings Africa into a single market, an economic zone comparable to North America and Europe will be born.
The startup market, which originated in fintech, has seen rapid growth over the past five years, but seed rounds are driving the number of rounds, and the market has not yet matured to the point where all rounds are increasing. Fundraising in the African market is said to be plagued by Series B rounds, and collaboration with politics and government is considered essential to becoming a "prominent stake." As a continent with many social issues, there are more zebra companies that combine social contribution with profits than unicorn companies. Nigeria, Kenya, South Africa, and Egypt are major startup cities with remarkable digitalization.
African startups are inseparable from social issues. Many startups are contributing to solving problems such as financial inclusion, off-grid areas, urban overcrowding, and the resulting congestion, housing shortages, and waste issues. Rather than simply following the innovations of developed countries, they are often seen leapfrogging, using the power of mobile and digital technology to turn disadvantages into advantages. For example, if you don't have an address and mail can't be delivered, instead of developing the land or surveying neighboring property boundaries, they are issuing virtual addresses via mobile and having mail delivered to your current location, an idea not even seen in developed countries.
There are several patterns, including: 1) developed countries testing advanced technologies such as drone transport and IoB in the African market and using them as a testbed for re-importing to their own country, 2) entering the market targeting only the African market and investing in its growth potential even though it is small, and 3) investing in domestic African startups. Pattern 3 is currently at the center of innovation, and this type of startup is expected to continue to increase in the future.
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