South Africa
Cape Town
“Cape Town is often referred to as the tech capital of Africa, with a vibrant ecosystem where tech entrepreneurs can thrive and grow sustainable businesses. UVU Africa is driving inclusive growth through business incubation, skills development, and open innovation from Khayelitsha to Kigali.”
Highlights
Cape Town is South Africa’s technology hub and home to many local and international tech companies. The city is also a hotspot for the green economy. With its natural beauty, high quality of life, and excellent municipal services, Cape Town draws thousands of immigrants from all over the world. Africa Data Centres announced in January 2023 that it is building an additional 20MW data center in Cape Town. The new facility will be operational in 2024. Tech giants including Amazon, Google, Oracle, and Microsoft have set up cloud regions in South Africa.
UNDP Africa is launching eight Timbuktoo hubs across Africa’s leading startup ecosystems, including Cape Town. In September 2022, VC firm Knife Capital’s announced a $50 million African Series B expansion fund. The SA SME Fund is mandated to invest 50% of its capital into businesses owned and manages by Black Africans. Accelerator Grindstone assists high-growth, innovation-driven startups to become more investable, sustainable, and exit-ready.
AI-as-a-Service startup DataProphet closed a $10 million Series A round in August 2022. In September 2022, biometric authentication company iiDENTIFii raised a $15.2 million Series A. In January 2023, mobile games publisher Carry1st raised a $27 million pre-Series B round, and in February 2023, streaming data platform Redpanda Data raised $50 million, bringing its total funding to $76 million.
Africa’s Green Economy Summit was held in Cape Town in February 2023. TECHSPO Cape Town is set for October. Africa Tech Festival 2023 will take place in November, and SuperReturn Africa will be held in December.
Ecosystem by the Numbers
Sub-Sector Strengths
Fintech
The Global Financial Centres Index ranked Cape Town #64 out of #119 financial centers around the world, just ahead of Johannesburg. The eighth Africa Fintech Summit was held in November 2022 and was billed as Africa’s premier Fintech event. In February 2022, API Fintech startup Stitch raised a $21 million Series A. In February 2023, online lending company Lulalend raised a $35 million Series B. In October 2022, secure data collaboration platform Omnisient raised $3.5 million.
Edtech
Mindjoy aims to teach a million school children in South Africa and beyond to code. The Injini/Mastercard Foundation EdTech Fellowship Program 2023 is an equity-free, hybrid venture support program that takes a partnership approach to business acceleration. In May 2022, AI robot study buddy FoondaMate secured $2 million in seed funding. Injini South Africa EdTech Week was held in November 2022.
AI, Big Data & Analytics
In 2022, an event led by the South African Human Sciences Research Council gathered policymakers to consider key priorities for advancing responsible AI. The Global Forum on Bioethics in Research held a meeting in November 2022 on the theme of Ethics of AI in Global Health Research.” The AI Summit Cape Town was held in November 2022 and the International Joint Conference on Artificial Intelligence is planned for August 2023. In August AI and autonomous manufacturing company DataProphet raised $4.5 million in Series A funding.
Reasons to Move Your Startup to Cape Town
Business-Friendly Environment
Cape Town’s Enterprise and Investment Department seeks to attract investment and support commercial activity. Within this department is The Business Hub, a one-stop service to help entrepreneurs access information regarding city processes and connect to specialized business-support agencies. Cape Town’s 10-year infrastructure project pipeline aims to create a foundation for economic growth over the next decade.
Established Startup Scene
From Fintech to Agtech to eCommerce, Cape Town is home to startups in a wide range of sectors. The city is home to 33 incubators and accelerators, as well as a number of coworking spaces. The Innovation Collective accelerator program is part of ecosystem hub Innovation City Cape Town, which hosts over 60 startups, corporates, and investors.
Special Economic Zone
Cape Town’s Atlantis Special Economic Zone (ASEZ) is dedicated to supporting green and circular economy businesses. Companies operating in the zone benefit from a preferential 15% corporate tax rate, employment tax incentives, and customs controlled area tax relief. A second zone supports agricultural activities.
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