Top 5 African Cities With The Most Developed Startup Ecosystems 2022

Often, entrepreneurs have advised that a business location plays an active role in determining if it will succeed or not. I.e picking the right country/city can mean the difference between success and failure as ecosystems have been described as a major opportunities for businesses today.

Startup ecosystems are emerging in all corners of the world, as ambitious founders and creative startups are keen to find unique ways to find a great product-market, fit to solve a large percentage of the world’s problems.

However, innovative ideas can only amount to success within an ecosystem that is built to aid and nurture them, which implies that entrepreneurs need supportive environments with the most developed ecosystems to launch their startups.

A global startup ecosystem map and research center, Startupblink published its 2022 Global rankings of the most startup-friendly cities in the world. During its research, the center collates data from more than 60,000 startups and measures ecosystems based on the number of startups (quantity), quality, and their business environment.

According to the rankings, only one city in Africa, which is Lagos made it into the global top 100 rankings, making it the only African city ever to reach this rank.

Here is a list of the Top 5 African cities with the most developed startup ecosystem

1. Lagos, Nigeria: The city of Lagos has been described as the heart of Nigeria’s growing startup ecosystem, with its startup ecosystem valued at $ 9 billion. The city jumped from 41 places to 81st position globally, and is the first African city to break into the top 100 ranking. Lagos is also ranked 24th globally in the food tech industry and 43rd in e-commerce and retail. The city has earned a name for itself as a tech hub, rapidly advancing towards a 24-hour economy, which generates 10% of Nigeria’s total GDP of $432.3 billion. For startups, Lagos appears to be a land of promise and a vibrant tech ecosystem that is bursting with energy and dynamism. It is no surprise that the city remains a top destination for investors and businesses because it gives them the opportunity to succeed.
2. Cape Town, South Africa: The city which is home to almost two-thirds of all startups in South Africa, is not only a beautiful tourist destination but also has a flourishing startup ecosystem. Most startups located in cape town are tech-enabled and are solving the myriad of problems peculiar to the African continent. There is the availability of Capital, talent, and supporting organizations in the city that makes it easy for startups to thrive. The city also has a robust venture capital and investment network, and is also one of the most important IT hubs in the African continent. In 2011, the city completed a 500km optic fiber network project, that provides broadband services at a lower cost.
3. Johannesburg, South Africa: The city of Johannesburg fondly called “Joburg”, which ranks number 2 in South Africa, has been described as an ideal location for Fintech, Software and Data, and Transportation startups. The city which is home to some of Africa’s leading banks and financial institutions, has its ecosystem valued at $572 million as of 2021, with an estimation of 450 startups in the city with approximately 30% of them in Fintech. It has a population of about five million people with more than 220 programs offering support to startups. More than 70% of South African companies are located in the city as it generates 15% of South Africa’s wealth.
4. Cairo, Egypt: In Egypt, the startup ecosystem is largely restricted to Cairo, as the rest of the cities in the country offers very few opportunities. Cairo has about 26 million inhabitants which has been attributed as the major strength of the ecosystem in the city, when talking about startups, allowing them to test products easily and grow fast. The city has been described as being friendly to young entrepreneurs enabling them to start businesses with very few financial resources, while offering a wide range of incubators, accelerators, and co-working spaces for early-stage startups. Cairo ranked as the first ecosystem in the Middle East and North African region in 2021. The city marked an overall increase of 60% in VC funding rounds over the past five years and in 2021.
5. Nairobi, Kenya: The city of Nairobi 3 years ago, was named the second best city for the startup ecosystem in Africa, which made it earn the name “Silicon Savannah”. The startup market in the city is booming as entrepreneurs are beginning to consider Nairobi as a viable solution where they should establish their company. It is interesting to note that Global tech giants like Google, Microsoft, and Samsung all have premises in Nairobi. In recent years, Nairobi has developed a thriving startup scene and has made a name for itself as a tech hub. The city has been described as the “mother of mobile money” and a “Mecca” of innovation and diversity. With a population of around 4.5 million people, Nairobi has been ranked as the sixth wealthiest African city and a friendly location for startups.