START UP CAPITAL OF AFRICA

Currently, Cape Town is the base for almost 60% of South African startups (Silicon Cape). It’s really not surprising when you consider that the Mother City is the Digitech hub and startup capital of Africa. Boasting a leading location for technology start-ups and venture capital deals, it offers a wonderful and productive home for several successful pan-African collaborations. Best of all, the City remains a technology leader in mobile software, revenue management and payment process sectors.

Why Start-Up in Cape Town?

From across the globe, entrepreneurs and startups are drawn to choosing Cape Town for a number of compelling reasons: 

• Idyllic lifestyle
• Diverse communities
• Access to startup capital 
• Top tertiary institutions 
• World-class talent
• A culture of innovation

Additionally, investors are also drawn to the city thanks to the existing range of quality Cape Town start-ups, attractive tax incentives, and access to Africa.

The Mother City’s Startup Landscape

The ongoing advancement of the Information Technology infrastructure and innovative software developments in Cape Town has allowed the e-commerce industry to grow at a rapid pace here. Currently Cape Town based companies account for the 10 most visited e-commerce websites in the country (Effective Measure, 2014). In fact, Cape Town has been so successful in carving out this niche, that it is now widely considered to be a tech and e-commerce hub within Africa.

Similarly, of the 742 emerging tech or tech-enabled companies surveyed as part of a 2015 study by PwC study, 56% were headquartered in the Western Cape (the majority are based in Cape Town). In an industry that is strongly reliant on supply-side factors like the availability of ICT skills, and the prevalence of entrepreneurship, Cape Town has been able to carve out a competitive landscape. In fact, despite having physical access to a much smaller market than some of the country’s other metros (e.g. Gauteng), business is booming thanks to the City’s supportive infrastructures.

Cape Town’s Business Hub & Infrastructure

In terms of infrastructure, Cape Town’s Internet penetration is 63% and the city has one of the largest open-access fibre networks in Africa (Wesgro). Furthermore, Cape Town has 25 (and growing) co-working spaces and more than 20 local and international accelerators that support between 10 and 15 start-ups in Cape Town each year. These resources include: 

• Khayelitsha Bandwidth Barn
• Woodstock Bandwidth Barn
• Rise Cape Town
• Workshop 17 
• Work & Co
• VeloCiTi
• Entrepreneurial Development Programme
• Grindstone
• Startupbootcamp
• Injini 
• Seedstars

Furthermore, the Cape Innovation & Technology Initiative (CiTi) is regarded as one of the oldest tech incubators on the continent. It has incubated more than 2 000 businesses and supported more than 3 000 entrepreneurs. It offers a three-month programme for women entrepreneurs, the six-month FutureMarkers initiative for idea-stage businesses, and a range of two-day to three-year business development support programmes. 

Some startups also receive corporate support from global enterprises such as Google Developers Launchpad Africa, Mercedes-Benz Innovation Challenge, MTN App of the Year Awards, and FSAT Labs incubator. Furthermore, the University of Stellenbosch and University of Cape Town’s Bertha Centre for Social Innovation and Entrepreneurship provides support for entrepreneurs too. 

Cape Town’s Spirit of Innovation & Creativity 

The city has seen several digital and gaming startups rise to international acclaim. Local success stories include Triggerfish and Sea Monster animations and games. In e-commerce, enterprises like Yuppiechef, Takealot.com and online fashion giants Zando.co.za, Superbalist.com and Spree have become incredibly successful. Food delivery service OrderIn and cleaning service SweepSouth are just two of the startups dominating the digital services category.

The list is truly endless when it comes to sectors like this, each featuring incredible innovations, from SnapScan to GetSmarter, and everyone in between.

Startup Capital & Investment in South Africa

Raising startup funding in South Africa can be tricky, as with any other destination. However, as a smaller country on the global stage, with few consumers that have any real buying power, investors tend to write smaller cheques less often. They also usually only commit at much later stages than is typical of investors in the more developed economies.

That being said, locking down venture funding is entirely possible – the investors are out there and we can help you find them. After all, the City of Cape Town has been ranked as the top metropolitan municipality in South Africa when it comes to the ease of doing business. Contact us today for detailed information about how to set up your business with startup capital in Cape Town. Our friendly, knowledgeable business hub is waiting to assist!

Downloadable Resources

Evaluation & Network Analysis of the Cape Town-Stellenbosch Tech Sector

Cape Town Tech Ecosystem Presentation 2018

Cape Town Tech Ecosystem Infographic