A report by Endeavour Insight has ranked the greater Cape Town area, including Stellenbosch, as Africa’s tech capital.

According to the research, 450 – 550 entrepreneurial companies in the Cape Town-Stellenbosch area, employ between 40,000 to 50,000 people. This is more than double that of the tech sectors in Lagos and Nairobi, which respectively employs 9000 and 7000 people. Furthermore comparable to Nairobi’s 1% and Lagos’ 2%, 3% of local companies have reached scale (100+ employees).

According to research, of the 500 plus entrepreneurial companies in the tech sector, 20% are in e-commerce and SaaS sectors, and 15% in fintech (financial tech).

Internet giant Naspers, Africa’s highest-valued tech company, Clickatell, BrandsEye and GetSmarter are Cape Town-based companies with strong global presence.

The dynamism, productivity and high-impact companies of Cape Town’s tech sector make it stand out as one of the most successful models in Sub-Saharan Africa.

   “It has generated the continent’s most highly valued tech company as well as other software businesses that have reached scale, exited for significant sums, or grown to become leading businesses on the continent,” stated Rhett Morris, Director of Endeavor Insight.

Tim Harris, WesGro CEO added that although the report showed that the Cape is a place of innovation and the future, it can do more to unlock its full potential in order to become one of the top tech destinations in the world. He shared that his investment promotion team has aided in securing over R1bn in investment in the Cape tech sector over the last five years.

The report found that the top five reasons for starting a tech company in Cape Town are:

• The city being an inspiring place for entrepreneurs to network.
• The perception of Cape Town as a tech hub.
• A vibrant local tech business community for startup support.
• A globally competitive lifestyle that promotes innovation.
• Strong universities and major companies that help bring talent to the city.

While the Cape tech sector has shown significant growth, dynamism and innovation over the last decade, there were challenges noted by companies interviewed.

Chief among these are access to talent — a problem also encountered in Johannesburg and other African cities. Second to this was access to equity and finance, although the Cape was performing better than Nairobi and Lagos in this regard. Lastly, access to customers was noted as a problem being faced by these entrepreneurs.

Many of the skills utilized in the tech sector are those that are listed by the South African Department of Home Affairs as being scarce and in high demand in South Africa. Accordingly these skills would qualify a person as being able to attain a Critical Skills Visa to enable the person to work in South Africa. If you would like to work in Africa’s Technology Capital we would be happy to assess your qualifications and provide insight into the Critical Skills Visa application process.