A Deep Dive into East Africa’s Tech Start-up Ecosystem -New survey reveals lack of access to investors, reliance on international VCs and global recession trends as the biggest perceived... -
), is part of a benchmark survey mapping barriers faced by regional start-ups as well as opportunities to power nascent tech businesses in the region.The survey found that access to funds over the last 12 months remained relatively stable compared to the previous period, as 25% indicated that year-on-year investment levels remained similar, whilst 25% and 19% of respondents indicated respectively a slight increase and a slight drop of investment levels.
The region remains a dynamic hub for start-ups which explains how 74% of tech start-ups only needed to meet up to 5 investors before securing funds. This number drops even further for seeds businesses as 52% of them needed less than 3 investors before securing new investments, a number that seems closely intertwined with their reliance on friends and family for fundraising.
Talent recruitment still receives 14% of the funds received across all funding stages. But attracting new talents doesn’t seem to be perceived as the biggest priority for fund allocation.Whilst there is huge tech potential in the region, there are still significant roadblocks that need to be addressed for the region to maintain its competitive edge as a tech start-up powerhouse.
Most importantly, 59% of respondents perceive the lack of access to investors as a business barrier. In light of the SVB crisis, East African start-ups’ appetite to diversify their sources of funding is likely to only increase.
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