AUDREY VERHAEGHE: The case for the SA Innovation Summit
Start-ups need all the support they can get; after all, they are the leading employers and industry giants of tomorrow
Eventing was probably the industry hit hardest by the restrictions imposed to counter the Covid pandemic. Events for business or entertainment had to be cancelled or went online. All event owners had to analyse their purpose and find new ways to fulfil that purpose. While we found alternative ways to offer our services, not one could deliver all that the event does.
Events like ours showcase, connect and capacitate in the early stage start-up ecosystem. We attract early stage start-up investors and tech start-ups from 56 countries. Therefore, an event like this attracts visitors to SA, who spend money here, it builds international bridges and attracts investment to SA. These are the most obvious calculations that can be used to measure impact. But the most valuable invisible contribution lies in the time value of money.
Every start-up that we connect with investment, customers or other supporters, could become a billion-dollar company in five to 10 years. It takes an ecosystem to raise a start-up, and we present 50 to 80 new start-ups selected from thousands every year. This pipeline has produced multinationals such as Hear-X, Wi-group and Ozow, to mention a few.
Last year we connected more than 15 investable companies, including Pricepally, Akiba, Publiseer, Luna Law and Kweza. These are tomorrow’s giants. One sector, the Fem-Tech programme, raised more than R40m of investments and support in an undervalued and over-performing segment of the market: female tech founders.
In a space that is reported to have a funding deficit of billions of dollars in Africa alone, the event is plugging a small hole that grows into a tremendous contribution to the economy over time. Every start-up that is connected to opportunities such as finance or receives global exposure will grow up and contribute back into the economy.
SA is regarded as one of the four big start-up destinations in Africa, along with Kenya, Egypt and Nigeria. This is a trend that is growing at 79% a year across the continent. Early in 2021 the continent could boast only two unicorns (a start-up company valued at $1bn or R15bn) by October, or 10 depending on whether you define a unicorn being from Africa, in Africa, or for Africa.
Alongside the only one connected to SA and with a local founder — Melvyn Lubega’s Go 1 — they include Jumia (Nigeria, e-commerce - 2019); Interswitch (Nigeria, Fintech 2019); Fawry (Egypt, Fintech 2020); Flutterwave (Nigeria, Fintech 2021); Chipper Cash (Nigeria, Fintech 2021); Opay (Nigeria, Fintech 2021); Go 1 (SA, Edtech 2021); Swvl (Egypt, Mobility, logistics, 2021); Wave (Senegal, Fintech 2021); Andela (Nigeria, Edtech 2021). Source: Zacharia George, Launch Africa.
The saying in the investment world is “ecosystems develop very slowly and then all at once”. It’s at such events that these trends are discussed, and the ecosystem players gather, make deals and support start-ups.
In 2021 we have played a role in sending 55 start-ups into the world. This is one way we create connection for deals to follow. By the time these businesses become giants they come back and expand work in the SA economy. Each start-up looks like a small step, but they represent a giant leap.
Unicorns are produced by ecosystems that offer investment, connection, support, know-how, media exposure and market at scale. We bring all these together to produce more deals, exposure, support, thought leadership and know-how. Every action connects and multiplies.
On the floor this year we had three convertible notes that closed for R4.5m and R7.5m, done and dusted. More than R75m of deals that started discussions; these were in cloud tech work support, with millions represented in small angel and seed deals. In just five years these millions will become billions. Tracked over time this annual event becomes a catalyst for the economy.
However, it is not often immediately apparent and therefore is difficult to claim. I like to believe that the role of a summit like this is to attract deals and support start-ups. After all, they play an instrumental role in the success of our economy, and we need to get behind them if we are to solve our unemployment crisis.
• Verhaeghe chairs the SA Innovation Summit.
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