Cape Town is the undisputed DigiTech hub of Africa and a leading location for technology start-ups, venture capital deals and software companies.
The City of Cape Town, including Stellenbosch, is now home to approximately 550 entrepreneurial enterprises that work in software development, e-commerce, information technology and many other DigiTech sectors. In fact, the Cape Town DigiTech industry employs between 40–50 000 people. This is significantly more than the tech sectors in Lagos and Nairobi, which employ 9000 and 7000 people respectively (Evaluation and Network Analysis of the Cape Town-Stellenbosch Tech Sector Report, 2018).
This part of South Africa also boasts the privilege of being home to the headquarters of global internet giant, Naspers. As Africa’s highest-valued tech company, it is a massive tech investor on an international scale buying into companies like Tencent and many others.
Cape Town’s Competitive Advantages
The dynamism, productivity and high-impact companies of Cape Town’s information technology sector make it stand out as one of the most successful models in Sub-Saharan Africa.
Competitive advantages in this industry include:
* Cape Town is a largely supply-driven city. The availability of ICT skills and the prevalence of an entrepreneurial culture are key aspects in this regard.
* There is better availability of venture capital in Cape Town (Endeavor Insight: 2019).
* Cape Town has established itself as a key technology hub in South Africa with a number of major companies launching their head offices in the city. This is, in turn, attracting other tech companies. There are benefits to agglomeration.
* In a highly mobile sector, Cape Town’s natural beauty allows for a better working environment and lifestyle is a strong pull factor for skilled employees.
* The diverse ecosystem of companies across the value chain and a strong presence of supporting institutions provide for ease of business operations.
* The perception that software developers are more progressive attracts other business operations, creating an environment of innovation,
* digital connectivity and opportunity.
Prominent DigiTech Companies in Cape Town
There are a number of multi-national enterprises that have acknowledged the Cape as the tech capital of Africa by setting up operations here. After all, this is a place of innovation and future-forward thinking. These hugely successful brands include:
* Software and app development companies like Fontera, Alacrity, Peruzal, Refresh, Creative Minds, Realm Digital and Zomato.
* Web services businesses including Amazon Webservices, Microsoft and Naspers.
* Payment gateways or platform enterprises like PayU, Payfast, PayGate, Peach Payments, Snapscan and Yoco.
* FinTech initiatives including Fundamo and Zailab.
* EdTech enterprises like Getsmarter and Injini.
* Online marketing agencies including Quirk, Glow, Liquorice and IncuBeta.
* E-Retailers like Gumtree, TakeAlot, Spree, Zando, Yuppiechef, Lekkeslaap, SafariNow, Quicket and OLX.
* Industry bodies and organisations including Cape IT Initiative, Silicon Cape, E-commerce Forum Africa, Codex, Launch lab and Bandwidth Barn.
The Cape of Great Opportunity
In summary, Cape Town truly is an inspiring place for investors and entrepreneurs to network. It’s perceived as a tech hub and is delivering year after year with growth and innovation. The local tech community is vibrant and enthusiastic with a large network of start-up support. The city and surrounds offer a globally competitive lifestyle that embraces recreation and natural splendour. In turn, this has led to a wealth of energetic talent being attracted to the city.
Why Cape Town? Many would argue why not. It’s a true drawing card for almost any DigiTech investment in South Africa.
Contact us for more information on investing in Cape Town. Visit Invest Cape Town.