Considered to be the fastest-growing continental economy in the world, Africa’s socio-economic and political climate has fostered a culture of entrepreneurship and enterprise. The surge in successful African start-up businesses has become a driving force behind the continent’s economic growth with favorable business conditions encouraging increased investment in the region. With a wealth of natural resources and a “young, urbanizing population“, Africa has become the global focal point for developing business and innovation.

A Formidable Market

Africa’s relatively young and growing population constitutes a growing market of consumers ready to engage in innovative goods and services. The young population also delivers plentiful labor for new businesses. The continent is rich in natural resources, a further advantage for the development of lucrative businesses. The goal of attracting increased foreign direct investment (FDI) encourages the authorities within Africa to invest in policies that will decrease investment risk such as tackling corruption, improving education and boosting technological innovation. The wave of start-up businesses emerging into the economy, alongside government strategies to encourage FDI, could improve the quality of life and reduce poverty across Africa.

New businesses create jobs, diversify the economy, attract FDI and encourage the development of new infrastructure.

Successful Startups

In the midst of global economic turmoil, many African businesses saw impressive growth during the COVID-19 pandemic by adapting to changing global market conditions to become more dynamic and innovative. Existing companies and startups in various sectors successfully transitioned to online operations.

Startups dominate Africa’s fastest-growing companies, with Nigerian trade finance services company, AFEX Commodities Exchange, holding the top position. The company generated impressively high revenues of $102 million in 2021.

Other companies featured on the top 100 list include the e-commerce company Wasoko in Kenya and the Egyptian company Globe Medex, established in 2017, which distributes ophthalmology equipment.

Female entrepreneur Talash Huijbers from Kenya founded InsectiPro, a company harvesting insects as a more sustainable and cost-efficient source of protein that is used for animal feed as well as crickets for human consumption. Elements of the harvested insects are also used for fertilizers and pharmaceutical production, minimizing waste. The innovation from InsectiPro has provided a possible solution to improve food security and nutrition in Kenya and beyond.

The African health care sector is also evolving through innovation from start-up businesses such as Jamii Life. The company developed a technology platform providing a virtual health care system aimed at increasing “accessibility, transparency, quality care and peace of mind” across South Africa, particularly benefitting low-income communities.

Promoting Development

In April, the NewSpace Africa Conference aimed to promote continued investment and development in the African space and satellite industry. The 2021 valuation of the African space industry was $19.49 billion and it could grow over the coming years, driven by pioneering startups and creating the potential for further economic growth, innovation and sustainability in Africa.

Alongside this conference, GMES & Africa launched a Startups Development program to support research and development in the African NewSpace sector, where it chose 15 businesses to showcase their innovation in the sector and encourage further investment.

The Africa Startup Initiative is a program supporting new businesses in various technological sectors such as AgriTech and Digital Health. The program connects startups with corporate partners, investors and the media. Startups in the program get access to workshops, mentoring and the opportunity to showcase their innovations to industry associates.

Attracting Investment

African start-up businesses are attracting increasing levels of investment from within Africa and across the globe. These startups raised more than $4 billion in funds in 2021, and investment remains on the rise, particularly within Africa’s developing technology industry. According to the U.N., “Africa is the most profitable region in the world,” generating the highest rate of return on inflows of FDI between 2006 and 2011.

However, business venture capital is not evenly distributed across the continent, and around 80% of the continent’s FDI goes to the “Big Four” African countries: Egypt, Nigeria, Kenya and South Africa. Sizeable populations, strong GDP growth, and eager innovation, particularly in tech-based industries, make the ‘Big Four’ countries more attractive to investors.

Global venture capital firms investing in Africa include New York-based Tiger Global, which has invested in various African businesses – one being Wasoko –  from industries such as software and financial technology. Y Combinator, a Silicon Valley company accelerating technology businesses, invested in more than 95 African startups between 2015 and 2022, according to

On the Right Track

In recent years, Africa has been forging a new development path, harnessing the potential of its human and natural resources to drive a new era of business. The growth of investment in African startups has opened up the realms of innovation in the continent to provide solutions for its biggest problems. Successful investment in startups is also helping to drive economic growth, improve quality of life and move toward eradicating poverty across Africa.

Sophie Sadera

Photo: Unsplash

African startupsThe Milken-Motsepe Innovation Prize Program for AgriTech is a multi-year, multi-million dollar competition in Africa. Companies and nonprofits advance technological solutions accelerating the United Nations (U.N.) SDGs. In hopes of expanding in the global market, many African startups proposing innovative AgriTech solutions compete to win a grand prize of $1 million. The competition provides the chance to attract the attention of investors. In May 2023, the winners were announced.

The 1st Place ($1 Million Prize): NovFeed

Tanzania faces a yearly demand deficit of 480,000 metric tons of fish. Although local fish farmers could capitalize on this demand, the country lacks access to reasonably priced and high-quality fish feed. This forces people to formulate their own feed, which lacks nutrition and stunts fish growth. Not only does selling inferior fish negatively affect the fish farmers’ incomes, but it also affects the health and well-being of consumers who are often from lower-income Tanzanian households.

NovFeed is a Tanzanian biotech startup that upcycles organic food waste into protein feed for livestock and fish. To resolve the lack of access to quality fish feed, NovFeed uses a bioreactor to combine fermented plant extract with bacteria culture, producing a protein powder that holds greater amounts of protein than traditional feed such as fishmeal and soybean. Indeed, fish that fed on NovFeed had a 97% survival rate and showed 40% more weight gain than those that fed on traditional feed, according to Solve.

NovFeed is highly scalable and costs 30% less than fishmeal and soybean. The startup’s innovative approach provides cheap, traceable and non-animal feed using indigenous ingredients. It also addresses unsustainable practices by current fish feed manufacturers. The production of soybean drives deforestation and the production of fishmeal disrupts the marine food chain by overfishing small fish.

If NovFeed expands globally and its intellectual property spreads to other companies, it has the potential both to end unsustainable fishing practices and reduce world poverty. Accordingly, the Milken-Motsepe prize has recognized NovFeed as one of the most innovative African startups in long-term sustainability.

The 2nd Place ($350,000 Prize): Karpolax

In Kampala, Uganda, many farmers and fruit vendors lose income due to the low shelf life of their produce, especially mangoes. Fruits and vegetables often rot before they can sell them. To resolve this issue, Ugandan-based startup Karpolax uses nanotechnology to extend the shelf life of fruits and vegetables by at least 33 days without losing nutritional value. According to Karpolax, 37% of food produced is lost between production and consumption, contributing to “huge losses to the farmers and everyone on the value chain.” The lack of access to fruit causes diseases that kill one in seven people.

Karpolax produces sachets infused with polymers that, when simply dropped in a box of fruits, inhibit fruits’ release of enzyme phospholipase D, which is responsible for deterioration. Karpolax’s product has a great market advantage, as it is the first of its kind in Uganda or East Africa. In comparison, its strongest competitor extends shelf life by only 20 days. The startup has had massive success in the Kampalan fruit market and increased vendors’ income by up to 25%. Karpolax is among many African startups that not only increase producers’ revenues but also contribute to enhancing consumers’ health.

The 3rd Place ($150,000 Prize): IRRI AfricaRice

Africa heavily relies on rice cultivation. Around 40% of Africa’s total rice farm area is in rainfed lowlands. For this reason, the livelihoods of African rice farmers are vulnerable to flooding due to climate change, which kills many crops before farmers are able to make sales. Using the SUB1 gene responsible for flood tolerance, IRRI AfricaRice has developed varieties of rice crops that survive over two weeks of complete submergence, compared to market varieties that survive only one week. The team believes that investment in its innovation could produce $3 billion in returns for African countries experiencing flooding, especially in sub-Saharan Africa.

Other Notable Prizes

Among the other innovative African startups that became finalists, a South African company Kuronga won the $100,000 prize for “Most Creative Use of 4IR,” which refers to “Fourth Industrial Revolution” technologies such as AI and machine learning.

Much of small-scale African farmers’ produce goes unsold because sellers cannot find suitable buyers for their product’s grade and price. Individual buyers may value a range of things such as shelf life, freshness and volume. Using the app Kuronga, sellers can snap a photo of their produce, after which the app uses machine learning to grade its quality and pair it with the right buyer.

Cote D’Ivoire-based COOL LION won the $100,000 “People’s Choice” prize. It rents out solar-generated refrigeration and cold storage. Its services save electricity money and provide a sustainable way for fish farmers to store their products. This is a big step in solving Cote D’Ivoire’s long-standing issue of tons of fish spoiling every day due to unaffordable cold storage facilities.

Looking Ahead

The Milken-Motsepe Innovation Prize Program for AgriTech in Africa has showcased the immense potential of African startups to address pressing challenges in the agricultural sector. Winners like NovFeed, with its innovative approach to producing high-quality fish feed, show the potential to transform not only the fishing industry but also contribute to reducing global poverty. Similarly, Karpolax’s nanotechnology solution to extend the shelf life of fruits and vegetables offers promising opportunities for farmers and consumers alike. These innovative African startups are paving the way for sustainable practices and economic growth in the region.

– Eric Huang 
Photo: Flickr