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Microsoft announces new initiatives to spur the growth of African start-ups

Through its recently established Africa Transformation Office (ATO), Microsoft has announced new initiatives to spur the growth of 10 000 start-ups and fast-track investment in the continent’s start-up ecosystem over the next five years. Photo: File

Through its recently established Africa Transformation Office (ATO), Microsoft has announced new initiatives to spur the growth of 10 000 start-ups and fast-track investment in the continent’s start-up ecosystem over the next five years. Photo: File

Published Mar 8, 2022

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THROUGH its recently established Africa Transformation Office (ATO), Microsoft has announced new initiatives to spur the growth of 10 000 start-ups and fast-track investment in the continent’s start-up ecosystem over the next five years.

Microsoft said its recently launched global Founders Hub will now be available to African start-ups through the ATO. The Founders Hub is a self-service hub that provides start-ups with a wide range of resources, including access to mentors, training content, tools such as Microsoft Azure and GitHub, and go-to-market and business support.

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Microsoft is also creating new partnerships with accelerators and incubators across Africa, including Grindstone, Greenhouse, FlapMax and Seedstars, to provide industry-based start-ups with access to markets, technical skills and funding opportunities.

These partnerships will provide Africa start-ups with access to training programmes; access to markets, including opportunities to co-sell with Microsoft; and, access to technology, with support from Microsoft’s engineering and product teams for co-innovation opportunities.

To enable start-ups to grow rapidly using investment funding, Microsoft said it was establishing industry alliances and partnerships with venture capital investors that will allow access to $500 million (R7.7 billion) in potential funding for African start-ups.

This funding will come from a network of venture capital investors, who will dedicate a portion of their financial support to start-ups in the Microsoft network.

Microsoft said it had already established partnerships with several key venture capital investors, including Banque Misr, Global Venture Capital and Get Funded Africa, and the intention is to grow this network of venture capital investors in the next five years to increase funding and enable them to scale up and drive economic growth.

The technology company said it believes the vibrant African start-up market was well placed to become a cornerstone of the continent’s digital economy, supporting local innovation through relevant solutions to societal challenges.

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Microsoft ATO managing director Wael Elkabbany said investments in Africa’s start-up ecosystem were growing at an exciting pace.

“According to the Organisation for Economic Co-operation and Development (OECD), there are more than 640 active tech hubs across Africa, accelerating innovation and creating employment, particularly among the youth,” Elkabbany said.

“However,” Elkabbany points out, “currently the African start-up market represents less than one percent of total investments worldwide. This needs to change.”

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He revealed that Microsoft’s endeavour to dramatically scale its impact would be driven by an overarching strategy with three key focus areas.

The Founders Hub includes opportunities for start-ups to sell to Microsoft’s corporate and enterprise customers. Microsoft will also support start-ups in geo-expansion activities, where start-ups can scale up by selling in new countries or regions.

Microsoft ATO start-ups lead, Gerald Maithya, said the Founders Hub allowed Microsoft to engage with accelerators, incubators and tech hubs across the continent.

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“Our partnerships with key African accelerators provide crucial support to accelerate growth-stage start-ups with their business development and market expansion plans,” he said.

Microsoft will partner with B2B-focused start-ups, scale-ups, “soonicorns” (businesses with the potential to become unicorns) and unicorns, across a range of leading African industries and those concentrated on working with small-medium enterprises.

Maithya said they understood that each start-up was unique and existed beyond the limitations of a one-size-fits-all partnership model.

“This is why Microsoft will tailor each partnership to the needs of individual start-ups, providing support and access – whether to technology, markets and co-sell opportunities, funding or digital skills – to enable them to grow and contribute to the wider economic growth of Africa,” Maithya said.

The primary goal of these partnerships would be to provide support in one or more areas, including access to technology, access to markets, access to funds and access to training.

Microsoft was establishing partnerships with venture capital investors; primarily, those with global reach and regional bases who were interested in one or more regions within Africa.

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