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Investors back 16.8% more African tech startups

Investors back 16.8% more African tech startups

According to the second annual Disrupt Africa Tech Startups Funding Report, released in January 2017, the number of tech start-ups that secured funding in Africa increased by 16.8% in 2016 compared to the previous year.

African startup successes that made global news in that year include Nigerian start-up Andela which received a US$24 million Series B funding round from the Chan Zuckerberg Initiative.

Global links are adding value to lucrative opportunities offered by accelerators for the continent's startup scene.

The opportunity for African startups to learn from some of the world's best while exporting African ideas and innovation to the global community is receiving greater attention among startup accelerators.

Several accelerators have recently added a wider global reach to the value proposition in their programmes for African startups.

Celine Duros, Head of Partnerships at The Meltwater Entrepreneurial School of Technology (MEST) which runs a training program aimed at securing seed investment opportunities for startups from five African countries, highlighted the value of a global network during last week's announcement of a new partnership between MEST and Paris&Co - an economic development and innovation agency of Paris.

"For MEST and all of Africa, this is a wonderful opportunity to bridge the gap between continents, giving African entrepreneurs more opportunities to grow globally – deal with language barriers and overcome cultural differences,"

The purpose of the partnership is to establish what the two organisations say will be "a mutually beneficial relationship which fosters the growth of each of the parties' ecosystems by facilitating the circulation of startups between the two continents and also the circulation of information between the two parties."

François Pujolas, the Ambassador of France to Ghana emphasised the value of cross-border alliances in the technology sector.

"This agreement, which is the first in our bilateral relations, shows the increasing role of France in global digitisation. In the case of Ghana, young entrepreneurs have been and will be invited to France in order to support innovation",

Importance of Africa

Yasaman Hadjibashi, Chief Creation Officer of Barclays Africa, which is running a 13-week programme designed to accelerate seven African start-ups beginning next week from the Rise Fintech innovation hub in Cape Town, says Africa is an important player in the world's startup community - particularly when it comes to FinTech.

"Selected startups will be given the opportunity to enter or expand their presence in the African marketplace via Barclays Africa Group's customer, product, and technology teams. Leveraging the global footprint of Rise, the selected startups will also have the chance to scale globally through Rise sites in London, New York, Mumbai, Tel Aviv and Vilnius...Africa has never been more important from a FinTech perspective on the world stage. With fast growing cities and the fastest growing internet population, new companies can reshape economies (and leapfrog technology, ideas and infrastructure), and Africa is best placed to do so. An increasing number of startups are taking advantage of this growth potential. Africa-focused tech startups raised a record-breaking $366 million funding in 2016, with the Fintech sector receiving most funding."

Another Cape Town-based accelerator programme, XL Africa, the World Bank Group's new five-month program designed to support 20 digital start-ups from Sub-Saharan Africa has also worked to leverage a global community of partners in both the private and public sectors.

Lexi Novitske, Principal Investment Officer for Singularity Investments, a venture group based in Lagos which is among the African and international investment groups and corporate partners for XL Africa says the program is aiming for global relevance for the startups that it will take in this November.

"The program's unique combination of targeted mentorship and access to investors represents a vital resource for digital ventures ready to grow. By connecting innovative business ideas with the knowledge and resources available in the ecosystem, XL Africa will create a pipeline of investment-ready companies, unlocking better investment opportunities for regional and global investors."

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