Grace Ashiru
Investors are showing great interest in technology-enabled businesses in South Africa, viewing them as opportunities for growth and innovation. Nchaupe Khaole, Chief Investment Officer of the Mineworkers Investment Company (MIC), highlighted that technology companies and startups in South Africa raised $168.6 million in funding in 2021. The funding surge continued across the continent, with over 600 African startups raising $3.3 billion in 2022, a year-on-year increase of 55.1%.
Khaole noted that these technology businesses’ attractiveness lies in utilizing innovative technologies like artificial intelligence, blockchain, and the Internet of Things to create groundbreaking products and services. Many of these companies in South Africa are addressing socio-economic challenges, making investing in them potentially lucrative and supportive of technology advancement and the broader economy.
Education technology is also experiencing exponential growth, with affordable and technology-driven education becoming more accessible. Personalized learning, gamification, online learning, and augmented and virtual reality drive this growth. With the increasing demand for online education and remote learning platforms due to more people working and studying from home, the need for innovative online learning solutions is growing.
Khaole emphasized the rising importance of cybersecurity solutions like cloud-based security platforms and AI-powered threat detection systems. In health tech, telemedicine is predicted to grow exponentially, and the use of out-of-facility devices and wearables will enable increased remote monitoring, supported by AI for diagnostics and remote health management.
Fintech remains a key investment driver due to limited access to affordable banking across the continent. Trends like digital payments, AI, machine learning, blockchain, and DLT solutions are accelerating fintech developments.
Additionally, with gro poolwing concerns about climate change and environmental sustainability, there is an increasing demand for technologies that can reduce greenhouse gas emissions, promote renewable energy, and improve resource efficiency.
While investing in technology-enabled businesses, Khaole advised investors to look for crucial features such as market potential, scalability, and innovative problem-solving approaches or replication of existing solutions not yet tried in local markets. However, he also cautioned that many startups face failure in the initial stages of intense competition and changing market conditions even after succeeding.
Despite the risks, Khaole expressed optimism about the potential for traction in emerging markets. The Mineworkers Investment Company actively seeks partnerships with technology startups for positive change, and their investments include companies like Limulab, Kelo, Quro Medical, and Livestock Wealth, among others, that leverage technology for beneficial purposes.
