The top 5 South African startup sector developments of 2019
- Start Ups & Companies
There have been ups and downs, and other ecosystems are developing fast, but South Africa remains a leader in tech innovation on the continent. Over the course of 2019 there have been
There have been ups and downs, and other ecosystems are developing fast, but South Africa remains a leader in tech innovation on the continent.
Over the course of 2019 there have been a number of developments in the country, including various new product launches, accelerator arrivals, and large funding rounds. But what were Disrupt Africa’s choices when it comes to the major moments of the last year?
IoT.nxt gets acquired by Vodacom
Acquisitions of African tech startups are few and far between, so when they happen they must be celebrated. Leading South African mobile operator Vodacom announced in May it was acquiring a 51 per cent stake in local Internet of Things (IoT) startup IoT.nxt, subject to approval by the Competition Commission, which was granted in August.
IoT.nxt has developed a unique technology stack that bridges the gap between all protocols in the industrial ecosystem. The Pretoria-based startup has been expanding in Europe and the United States (US) after securing ZAR100 million (US$7.7 million) in funding in 2017, and will now play a part in accelerating Vodacom’s IoT strategy and transforming its dedicated IoT business unit.
Naspers is back
For a famous South African company, Naspers had gone largely quiet in the country over the past few years, instead focusing on markets such as India. So it was good news for the local startup sector when Disrupt Africa reported in October last year on the launch of Naspers Foundry, a ZAR1.4 billion (US$96 million) fund to help South African tech entrepreneurs grow their startups.
Still, you believe it when you see it, and it wasn’t until June this year that online cleaning services platform SweepSouth became the first startup backed by Foundry, securing ZAR30 million (US$2.1 million) in funding. This was part of a funding round that was eventually disclosed as being worth almost US$4 million, while Naspers had promised more is to come.
Government support for startups grows
The usual conference talk around what governments can do for tech startups is that they should “get out of the way”, but every so often they can be helpful. In November, the Department of Trade and Industry (DTI) launched a new portal aimed at significantly speeding the process of registering a business in the country.
The pilot phase of the new BizPortal site allows entrepreneurs to register a business within one day, for ZAR175 (US$12), while the government is also being supportive to entrepreneurs in other ways. The hope is that this ushers in a new, entrepreneur-friendly era in South African politics.
Local startups increasingly turn to crowdfunding
Long-touted as an alternative source of funding for African startups, 2019 was the year crowdfunding took off as a real force, in South Africa at least. This all happened on the Uprise.Africa platform, which facilitates the whole investment process and enables multiple investors to support South African startups, with uptake perhaps encouraged by a partnership that meant successful fundraisers would also get listed on a stock exchange.
Uprise.Africa achieved a major milestone back in May when regtech startup Intergreatme secured ZAR32.436 million (US$2.19 million) from 406 investors, while P2P solar leasing startup Sun Exchange also performed pretty well. Some campaigns, such as those run by mobility startup LÜLA and fintech company My-iMali, were less successful, but there is a growing body of evidence that crowdfunding can work as an effective means of securing investment.
SA becomes a crypto hub
South African crypto exchanges DCX, VALR, OVEX, Coindirect and Revix have all secured investment in recent times, with such developments speaking to the vitality of a local space that also includes more global player Luno. With local uptake of crypto increasing, local exchanges booming, and a strong local support ecosystem, South Africa has – quite out of nowhere – established itself as Africa’s crypto hub over the course of 2019.