Nairobi, Kenya, Sept. 02, 2022 (GLOBE NEWSWIRE) — With a population of around 1.4 Billion people, India boasts approximately 73,000 startups. Of these, 105 had attained unicorn status as of July 2022. In comparison, the entire African continent has about the same population as India, but there are only four African startups that have attained unicorn status. In 2021, Indian startups raised approximately 42 billion U.S. dollars while African startups raised about $5 billion. Given its demographic and economic similarities to India, Africa has a massive potential that entrepreneurs would do well to tap into.
According to data by The United Nations, Africa is the youngest continent, with around 70% of the people aged below 30 years. The number of people in Africa south of the Sahara is expected to double by 2050, and the population of the whole continent is projected to be three times its current size by 2100. Africa’s young population presents an exceptional opportunity for the blooming of entrepreneurial activities. Young Africans not only provide dynamic talent but also stand to gain the most from successful business ventures in the African continent.
Despite great strides forward, entrepreneurs in the African continent still face major barriers compared to their colleagues on other continents. According to a Brookings Report, the majority of African startups fail because of issues such as low purchasing power, competition from established companies, unfriendly regulation, and lack of capital. To overcome these challenges, it is essential for African governments to create conducive business environments that will encourage emerging and potential entrepreneurs to set up shop in their countries. Additionally, venture capitalists ought to pay more attention to African startups especially in the early stages when securing funding is a nightmare for most founders.
If more startups become successful in Africa, there will be more jobs for the millions of African youth who are languishing in unemployment. According to a 2015 report by the African Development Bank, one-third of African youth are unemployed. More recent statistics indicate that unemployment is still a rampant problem in Africa. For instance, South Africa has an unemployment rate of around 35%, Nigeria has 33%, and Lesotho has 24%. The rampant unemployment in Africa has led to highly dangerous illegal immigration to Europe, high crime rates, and economic stagnation.
Edtech is one area that entrepreneurs can focus on to make the most impact in Africa. While India has a thriving edtech ecosystem with globally renowned startups such as Byjus and Unacademy, with the former valued at 22 billion U.S. dollars, Africa is still in its early stages of edtech innovation. So far, the total number of edtech startups in Africa is estimated to be around 141. Together, these startups have raised around 935 million U.S. dollars.
Although challenges around internet and electricity access remain, Africa has made huge progress in the last two decades. According to the Internet Society, internet penetration in Africa was 43% in 2021. Compared to less than 1% in 2000, the growth has been more rapid than in any other part of the world. In addition, mobile phones are now widely available, thanks to affordable models that are chiefly imported from China and other Asian countries. Some African countries, for example, South Africa and Namibia, have more than 100% mobile penetration, meaning there are more mobile phones than people.
The fact that Africa has significant mobile phone and internet infrastructure in place means that it is possible to launch edtech ventures and succeed while at it. Some African edtech startups, for example, Kidato and Edukoya have already managed to reach thousands of African students. Edtech companies have the potential to transform and massively improve the way African learners access education. With better education, young Africans have a better chance to compete and thrive at the global level. Access to affordable and quality education is also one of the best ways to nurture future African leaders who will help the continent attain its full potential.
8B Education Investments is part of this emerging African edtech ecosystem. Founded three years ago by Dr. Lydiah Bosire, the company’s mission is to help African students secure funding to study abroad. 8B Education has developed a robust scholarship research tool and a lending marketplace that enables African students to access affordable loans for their education. The company was built in response to the large number of African students who get offers to study in international universities but have to give up their dreams because of funding barriers. Besides providing funding, 8B Education provides mentorship, career guidance, and job application support to African students. The company hopes to reach at least 100,000 African students by the end of 2023.
Africa and its youthful population have immense potential that can be unleashed through innovative entrepreneurial activities. The edtech sector is especially important because it widens education opportunities for young Africans, making them better citizens and leaders of tomorrow. It is high time that venture capitalists and African governments provided all the support that entrepreneurs need to succeed in the African continent.
About 8B Finance: Launchpad for African Brilliance
8B Education Investments is on a mission to empower African brilliance to have a global impact. Towards that end, 8B has built the first platform that connects high-potential African students with world-class colleges and universities, the financing options they need to enroll, and the career support and job matching they need to realize their highest potential.
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