When spoken about startups it is common to discuss about startup scenario in USA, Europe for they are faring well and made known to the world. Many developing countries like South Africa do not come into the picture often. But one should know that apart from the diversity and breathtaking jungles, it also hosts many interesting startups. The western Cape is often called as South Africa’s Silicon Valley or the Silicon Cape. A study claims that around two-thirds of the country’s tech startups are based in the Western Cape, followed by Gauteng and KwaZulu-Natal.
Study by Ernst & Young shows South Africa is a country of extremes when it comes to entrepreneurship. On one hand, the country is said to face some serious challenges surrounding its entrepreneurial culture and education, while it ranks closer to the top for funding access as well as tax and regulatory issues. Though the funds are available, South Africa seems to be having a ‘highly mature’ financial sector – the funds are not made easily available and the capital is often too expensive. To bridge the gap between the startups and funds and also to educate the startups about operating business, many startup accelerators have come up in recent days. These accelerators offer entrepreneurial programs that has its own agenda and shares its ‘recipe for success.’ Accelerators are good choice for startups looking for mentorship, capital and recognition. Some of the top accelerators in South Africa are listed below:
Founded in 2013 and operated by Microsoft, the accelerator BizSpark aims to boost the creation of around 600 technology startups in the next three years. The program supports small software development businesses and entrepreneurs, using money from government’s jobs fund and its own 4Afrika initiative. It focuses on small software startups dealing in areas like education and healthcare that support national priorities. The startups are offered acceleration support, incubation, business training, access to mentors, software and hosting. To be part of the accelerator program, the startup must be developing software, privately held, generate less than R5 million in annual revenue and should be less than five years old. If the startup fulfils these criteria, then it can sign up for the program and join the network.
All a startup requires is a big idea and Microsoft will help them understand that idea and how technology can enable a solution. In the program, the startups are taught to optimize all its resources to reach its full potential. The program functions in collaboration with government’s Job Fund to reduce unemployment and help entrepreneurs create new businesses in South Africa. The participants get all privileges and offerings from Microsoft like Windows Azure, for three years. It is considered entrepreneurship and innovation are critical elements in driving a nation’s economy and that technology startup could breathe new life into the local software development sector.
*Barclays Techstars Accelerator:
Founded in 2015, Barclay’s in partnership with Techstars operates to embrace the expertise in the global startup ecosystem to help bring innovative technologies to the future of financial services. The accelerator program focuses on startups dealing with FinTech and cyber security innovation. The program offers the startup entrepreneurs unprecedented access not only to Barclay’s executives and decision makers but also Techstars’ mentors and investor relationship across 15 locations. The Cape Town based program will cater to companies addressing opportunities in Africa and other emerging markets.
The accelerator program is three-month intensive program based on a mentor-led approach with many mentors already confirmed for the Cape Town program including David Cohen, founder and managing partner of Techstars, Ashley Veasey, group chief information officer (CIO) of Barclay’s Africa and many more. Apart from the mentoring, guidance and networking, the participating startups stand the chance to pursue and fast-track partnership opportunities within Barclays, ability to spend part of the program in London or New York City and to secure up to $120,000 in investment from Techstars.
Founded in 2013 by South Africa’s top growth equity fund manager Knife Capital, Grindstone is a later-stage business accelerator in Cape Town to assist post-revenue high-growth technology enabled Small Medium Enterprises (SMEs) to become sustainable and fundable. The accelerator program aims to assist the entrepreneurs in solving problems related to scaling up, everything from coping with accelerated growth to raising funds, taking advantage of M&A opportunities, securing international partnerships, sharpening their business model and executing the plan. The CEO of Grindstone calls it part accelerator, part investor and part advisor.
Grindstone’s program is a year-long entrepreneurial development program that is offered to the selected 10 companies every year. The startups should fulfill certain criteria to join the program – existing South African SMEs, innovation driven, vision for future, market attractiveness, SA Job creation ability and success story potential, high growth potential and profile and passion of the management team. As an initial process of selection, 20 companies will be shortlisted for the early-stage investment course and gap analysis bootcamp where the 10 startups are selected. The program’s curriculum includes corporate advisory, coaching, mentorship and training. Some of the startups that participated in the previous batches are iKubu, OfficeBox, iono.fm and Apurimac Media.
*The Founder Institute:
Launched in 2013 and located in Johannesburg, the Founder Institute accelerator program is interested in accelerating any technology companies, not only online ones. The program attempts to globalize Silicon Valley concept by creating ecosystems with potential all over the world. The accelerator has its global presence in 40 countries. The program focuses on the aspiring entrepreneurs who can launch a startup with expert feedback and support from experienced startup CEOs without having to quit their day job.
The Founder Institute accelerator program is a part-time four-month training program and is open to existing and prospective tech founders of all kinds – with or without an idea, young or old and with a full-time job or unemployed. The program costs $950 and the institute takes 3.5% stake in the graduates’ businesses. The program is considered to be quite challenging. The selection process begins with aptitude tests and the selected startups go on with the incubation stage which is hardest and is focused on giving entrepreneurs the necessary tools and skills to succeed while also reminding them that business is hard. Around 40% of the startups drop out in the first level without about to with stand the challenges. The successful applicants are expected to attend three back-to-back lectures once a week that are delivered by successful startup owners.
*New Ventures Studio:
Founded in 2015, New Ventures Studio is a platform for young individuals who want to be successful entrepreneurs but realize the importance of up skilling themselves before venturing out into the unfamiliar territory of entrepreneurship. It was formed in partnership between youth development NGO Salesian Life Choices and Caban Investments Ltd. The program comprises of modules in business and personal development. The selected participants are exposed to entrepreneurial leaders, learn to cultivate ideas, develop commercial skills and develop an investment-ready business plan by the end of the eight weeks.
The acceleration program runs for eight weeks and focuses on aspiring entrepreneurs aged from 16 to 35, regardless of whether they have a business or not. The selected 20 participants would receive a scholarship worth R35,000 (around $2500) and attend the Cape Town-based program. At the end of the course, candidate would pitch to be selected for the New Ventures Studio Incubator. The five successful entrepreneurs would receive startup services, office space and one-on-one mentoring worth R100000 (around $7500). The remaining 15 startups would join the Studio’s Alumni Strategic Network. Some of the entrepreneurs graduated from this program are Brad Sitzer, Marshall Khunou, Sisanda Marwa and Garth Schreiner.
*Sw7 (Start with Seven):
Launched in 2014, Start with Seven is an interesting startup that focuses on assisting tech startups in partnership with Microsoft Bizspark. The program boast an array of some experienced and established Tech & Digital business leaders as mentors. The unique aspect of this program is that it does not require any of its participants to hand over equity in their companies. Rather than equity, the participants are asked to pay a nominal fee to participate in one of the three programs with the most intense being the a nine-week, part-time evening program. It being a part-time program, the startup founder can reap the benefits of an incubator program without having to give up their day jobs.
The combination of mentorship, lean startup methodology, peer support and experiential learning at the Sw7 makes its one of the most exciting accelerator programs in South Africa. The lectures at the program takes place in the evenings where the founders will be assisted to build out the plans and strategy for the business through a series of mentoring workshops from up to three mentors, group workshops with their cohort and individual exercises totaling to around fifteen hours of work a week. The three program it offers are Sw7 Accelerate (9 week part-time mentor-led innovation program), Sw7 Cape Town (accelerates tech and high growth innovation startups in partnership with Microsoft BizSpark & Standard Bank Incubator) and Sw7 GTM (5-week program to develop startup’s strategy execution plan).
Founded in 2014 in Rwanda, the tech accelerator Think operates to identify and support upcoming tech startups that are looking to create digital solutions in Africa. It empowers, supports and funds exceptional technology startup entrepreneurs to fast track their growth. The accelerator selects 5 teams per batch and offers a comprehensive incubation program. The program runs for six months and the package includes an office in state-of the-art facilities, technical and business support, mentorship and networking. Apart from this, the selected teams receive $15,000 in exchange for 10% equity stake and will have the opportunity to raise more funds throughout the six months period.
Think, operated by Millicon-owned Tigo that functions in seven African countries and have global presence, offers the participants to have access to a global network of technology experts, mentors and investors. The program offers structured training, professional coaching, access to Tigo’s technical resources and gain customer traction. The startups can make use of the wide international network to grow rapidly and expand. Based in Rwanda, the accelerated companies will benefit from a strong infrastructure and government supportive of technolog development. Rwanda hold the second position in sub-Saharan Africa in the World Bank’s “Doing Business” index. The company’s portfolio includes Cribpark, Nigeria, PollAfrique from Ghana and TorQue, Rwanda.