9 trends that could impact the African tech ecosystem in 2023
Over the last two months, the Benjamindada team and I have spoken with some of Africa’s finest VCs. In our conversations, these VCs shared their thoughts about possible trends in the African tech ecosystem.
As we step into 2023, it’s important to revisit those ‘predictions’ and keep them in mind. So, what trends will likely shape the African tech ecosystem in 2023?
1. More funding in the digital commerce space
“I foresee a surge in the number of investors in the digital commerce space. This is already happening as we’ve had certain interesting African and global funds reach out to us to help understand the market.” - Jake Kendall, Partner at DFS Labs
2. Increase in the number of series A startups
“I foresee the gap between the seed stage and Series A closing within the next two years. We'll most likely see a rise in Series A startups.” - Caleb Maru, GP at Proximity Ventures.
3. Crypto, DeFi and blockchain will take centre stage in Fintech
“The future of fintech is headed towards crypto, DeFi, and blockchain-based systems. I foresee solutions where there is crypto on the backend and traditional finance (visible) on the frontend (e.g., PayPal, Flutterwave etc.).” —Luke Mortsert, Head of Investments at Future Africa.
4. Africa will attract more global VC funds
“Africa will increasingly become a viable investment opportunity for more global funds.” — Lesego Tladinyane, Investment Associate at Newtown Partners.
5. Drop in startup valuations
“I foresee valuations returning to reasonable figures. Gone are the days when unrealistic, greedy numbers were the norm.” — Maya Horgan Famodu, Founder & Partner at Ingressive Capital.
6. Rise in consolidation, particularly in fintech
“We will see a lot of consolidation across sectors, but especially in fintech.” — Lexi Novitske, General Partner at Norrsken22.
7. Influx of quality talent
“I see top talent from around the world coming to work in Africa. There are still lots of people who leave but we also see a lot of them coming back to start or work in African companies which is exciting.” - Jake Kendall, Partner at DFS Labs.
8. Identity companies will scale massively
“Many identity companies will scale massively. I see that likelihood strongly happening.” — Lexi Novitske, General Partner at Norrsken22.
9. The pace of innovation might reduce
“I'm worried about the new paradigm of capital allocation. The intense regulation and a tighter market might harm innovation.” — Lesego Tladinyane, Investment Associate at Newtown Partners.
Which of these possible trends are you most excited about? Let’s know in the comment section.