Why Collaboration is Essential to the African Startup Ecosystem

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Nubia Capital

We are committed to investing in tech-enabled startups across Africa and helping founders grow extraordinary businesses.

Published Oct 16, 2023

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From the desk of Nubia Capital capturing the conversations, initiatives and dynamism in the African Startup ecosystem

Hello ecosystem builders, it’s another edition of Nubia Weekly.

We often say we would love to stand on the shoulders of giants. This popular quote by Isaac Newton could mean learning from the experiences of others or working closely with senior colleagues and mentors. Either way, standing on the shoulders of giants could oftentimes be challenging, especially because we are still standing. 

European countries have hacked a successful startup ecosystem building. We have countries like Estonia which raised 9800 Euros in 2022, 500% above the average of 130 Euros for other European countries. 

This was not achieved by chance. In Estonia, access to the internet is considered a basic human right. According to the Estonian Startup Database, they have up to ten unicorns from Skye in 2005 to Veriff and Glia in 2022.What learning points can Africa take from Estonia and other thriving startup ecosystems?   

A partnership with the Government. 

Sweden, a thriving ecosystem, features venture rounds like Northvolt’s €2.5 billion Growth Equity and as much as €450m for Epidemic Sound in 2021. As mentioned above, this is not a coincidence. Sweden is attractive to startups for many reasons. The government invests 3% of its GDP in R&D (research and development). According to Dealroom, Sweden is littered with research and innovation hubs all over the country. It is an innovation powerhouse as the country’s startup ecosystem is backed by public funds and investments targeting startups and macro initiatives to create opportunities for innovators to flourish. Several government agencies offer financial support or act as LPs to seed investors, making it possible for entrepreneurs in the early stage to access funds. This is evident in its position as one of Europe’s most thriving ecosystems. 

The governments of these ecosystems execute great plans to attract talent. Human capital as a pillar of the digital economy involves creating policies that educate the citizens in this regard, keep them and/or attract people. According to EU startups, Estonia has fully embraced a digital-first approach. Its admirable advancements in digital infrastructure have led to a transformative shift in public services, eliminating bureaucracy and paperwork. Estonia has been at the forefront of innovative practices, from pioneering online voting since 2005 to securely storing their health records in the cloud. Not surprisingly, this has attracted talents from across the world. With its several initiatives like the Startup Visa – where a  non-EU startup that has a tech-based business solution and whose goal is to develop and launch an innovative and repeatable business model with great global growth potential can apply for and Digital Nomad Visa – where Estonia is allowing those employed by foreign companies and not tied to one location to come to live and work in the country for up to a year, Estonia is an attractive destination for living and working. 

While it is important to understand that the Government has a role to play, ecosystem builders in Africa must take up the mantle to build creative solutions for the ecosystem like this and meet the government in the middle. 

It is imperative to understand the degree of the involvement of the Government in a thriving digital economy in Africa. However, citizens have a role to play in taking the first few steps, creating initiatives that the Government can easily invest in, and putting in the effort to seek collaboration with local and national bodies in the respected industry. As with any system, there are agencies, associations and bodies that represent the interests of the private sector and the public sector. 

As ecosystem builders in Africa, we must understand our role in creating a thriving climate. While we know that the Government can do better, we also know that nobody is coming to save us and we must meet in the middle. The European ecosystem is thriving but we must learn what we can from them and apply it critically. 


Investing Tip of the Week

Hello African investors. 

This section of Nubia Weekly is targeted at young investors interested in investing in Africa and its startup ecosystem. 

A tip for the week would be –

Intentionally take time to build your network.  Just like founders, your network is your net worth. You have to keep networking with potential LPs and HNIs. This is regardless of the time of raising your next fund. Network, go to events, build trust and deploy funds wisely. 


Resources for Founders

Our Managing Partner has put together a wealthy resource for you on advisory shares. 

Oftentimes, you will need the service of an advisor. In this e-book, you will learn what makes an effective startup advisor, how to approach and attract them, and the advisor’s role and responsibilities, determining equity compensation, vesting schedules, confidentiality agreements, and exit strategies.

Download the ebook here: https://www.davidsonoturu.com/blog

Did you enjoy this newsletter? Share with fellow ecosystem builders, investors and founders un your network.

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