Top 5 African Cities with Best Startup Ecosystems in 2023

Sub-Saharan Africa’s tech startup scene has expanded significantly, transforming the region into an innovation hotspot. We present the top five African cities with thriving startup ecosystems based on The Global Startup Ecosystem Report 2023 (GSER 2023). These cities have achieved outstanding results in terms of finance, deal count, and sector-specific improvements, drawing both entrepreneurs and investors.

1. Nairobi, Kenya

Nairobi has positioned itself as a key Sub-Saharan African ICT innovation hub. From 2018 through 2022, the city’s booming finance industry stands out, accounting for 41% of total technology startup deals. Notable accomplishments include Network International’s $291 million acquisition of payments startup DPO in 2021. Sun King, a manufacturer of solar home systems, also received significant finance, earning $499 million in total VC capital, including $330 million in Series D rounds in 2022. Nairobi’s ecosystem value increased by 281% between July 2019 and December 2022, solidifying the city’s position as a top startup location.

2. Lagos, Nigeria

Lagos, Nigeria’s economic powerhouse, remains an important player in the region’s tech startup sector. The city’s outstanding funding and valuation achievements have won it a spot among the developing ecosystems. OPay’s $400 million Series C fundraising round in August 2021 was the largest deal in Sub-Saharan Africa. Another Lagos-based fintech startup, Flutterwave, raised $250 million in a Series D round in February 2022, raising its valuation to more than $3 billion. The Lagos startup environment is further bolstered by the Nigeria Startup Act, which was implemented in October 2022 and provides a regulatory framework for the expansion of the digital sector.

3. Cape Town, South Africa

Cape Town has emerged as a promising African startup ecosystem player, ranking among the top 100 emerging ecosystems. The city’s ecosystem value increased by 23%, while early-stage deals increased by 26%. The inclusion of 22 new life sciences specialties has broadened Cape Town’s startup landscape. Its picturesque setting, encouraging business ecosystem, and easy access to resources all contribute to a thriving environment for startups.

4. Johannesburg, South Africa

Johannesburg, South Africa’s economic powerhouse, has a thriving startup ecosystem that is driven by innovation and growth. The city provides an advantageous investment climate, a talented workforce, and a thriving entrepreneurial culture. Fintech, e-commerce, and health tech are just a few of the industries fueling Johannesburg’s startup industry. The city provides the resources and assistance required for businesses to scale and obtain finance, making it an appealing place for entrepreneurs and investors.

5. Accra, Ghana

Accra, Ghana’s capital city, is rapidly establishing itself as a major West African innovation hub. The city has seen an increase in the number of startups, particularly in the fintech, agritech, and e-commerce sectors. Increased access to finance and resources, as well as government measures supporting entrepreneurship and innovation, all contribute to Accra’s expanding startup environment. Accra, with its favorable business environment and strong entrepreneurial culture, offers intriguing chances for businesses looking to make a mark in Africa.