Grace Ashiru
According to a report published by Endeavor Nigeria, a leading society of Nigeria’s highly-influential entrepreneurs, the technological ecosystem in Africa is about to enter a season of rapid growth. This growth will be a result of the pandemic and strong market forces.
With the title “The Inflection Point: Africa’s Digital Economy is Poised to Take Off,” Endeavor conducted a study on the recent history of Africa’s technology ecosystem, identifying trends and providing a road map for taking advantage of the new opportunities
In terms of job creation, GDP, and the continent’s overall economic outlook, The digital economy of Africa is fast reaching its S-curve, which is characterized by fast significant growth.
Currently valued at $115 billion, the digital economy of Africa is predicted to rise to $712 billion in 2050; based on current projections, one-third of the world’s young people will live in Africa by 2050, and the urbanization of the continent is faster than any other. In addition, by 2025, one in six people in Africa will have access to the internet.
The coronavirus pandemic increased the amount of digital activity in Africa, encouraging more people to participate. As a consequence of this, an increasing number of investors are becoming interested in the technological potential of Africa.
Between the beginning of 2020 and the end of 2021, the amount of funding available for digital start-ups in Africa increased by an amount that was twice as high as the global average. Early investors interested in cashing out have more options available as the number of liquidity events, unicorns and mega-rounds continue to rise.
The confluence of these occurrences has set the stage for success in the African technology landscape. But investors still have room for exploration.
Because there were so many transactions in the range of 1 to 5 million US dollars in the previous year (600), compared to the range of 5 to 50 million US dollars (less than 150), there’s a low probability unlikely there will be sufficient supply in the market as businesses that were previously in the 1 to 5 million US dollar range move on to larger ticket sizes.
Using the continent’s current abundance of innovation to generate even more growth and prosperity with the right financial support is possible.
According to Endeavor Nigeria CEO Tosin Faniro-Dada, “The data gathered in this study is lucid – “Africa will be the next frontier for digital innovation.
An impending tipping point in our journey toward complete digital transformation is about to be triggered as a result of the interaction of young and technologically savvy people, the emergence of new technology, and the behavioural effects of the pandemic.
We’re excited about how much more money African entrepreneurs are getting. However, we must succeed in making it much more convenient for other investors to write the checks so that we can speed up the growth we think is coming.
The African technology ecosystem has recently witnessed some acquisitions and captivating fund rounds. But this report shows that we haven’t even begun to scratch the surface.,” said Topsy Kola-Oyeneyin, McKinsey and Company partner.
Fragmentation and Informality have continued to be a problem in many African sectors, limiting the range of goods and services purchased. In light of the disruption opportunities shown in the report, likely, this report might very well aid interested investors in adjusting their organizational structures.
