Africa-focused tech accelerator Start with Seven (Sw7) has partnered with Microsoft to launch the Sw7 Microsoft Partner Acceleration Programme to help businesses to release market-appropriate products quicker and scale more effectively.
Odette Jones, Sw7 co-founder, said Africa is a B2B-first economy and largely unfunded. "... this means our businesses tend to take longer to lift as they are constrained by the slower B2B sales and engagement cycles. Our markets are fragmented, distributed and data poor, so creating and executing an effective scale strategy can be complex, expensive and time-consuming. Understanding the accessible and addressable markets is the first significant challenges these businesses face."
The partners believe there is a huge level of engagement from Africa's start-up ecosystem and this has gone from less than fifty technology hubs four years ago to over three hundred and fifty today, this is still growing.
"There is a lot of hype in the sector, particularly around funding, that is driving unrealistic expectations in the market. The data Sw7 has is that around 1% of our technology businesses are funded and that three out of ten funded businesses yield a return. Many local businesses were seeking valuations based on the digitally accessible western markets, there is some evidence the hype cycle is slowing down and moving towards more value and evidence based engagements. Post revenue businesses that have a product in the market and a good income statement and high growth potential are investable, the earlier stage high risk markets are largely un-serviced," they add.
The programme will focus on businesses, primarily in South Africa, that leverage the Microsoft stack to scale and are more product- than services centric.
Ideal businesses will have launched a cloud-based technology product and have some paying customers. The programme focus is more execution than discovery, the organisers explain.
They believe South Africa has more digital skills and online business traffic than the whole of Sub-Saharan Africa combined. "African business digitisation will start here. Gauteng is Africa's tech powerhouse so starting here is the obvious place, of the 485 000 skilled ICT technicians we have in South Africa 290 000 are in Gauteng, 82 000 are in the Western Cape. We are launching the programme based on where the skills and the market opportunity are."
Value in datacentres
In early March 2019 Microsoft announced the opening of its first datacentres in Africa, with the general availability of Azure from the new cloud regions in Cape Town and Johannesburg, South Africa.
According to the Cloud Africa 2018 report, cloud use among medium to large organisations in Africa has more than doubled between 2013 and 2018.
Due to the benefits of cloud in offering efficiency and scalability, more than 90% of surveyed companies in South Africa, Kenya and Nigeria have plans to increase their spending on cloud computing in the next year
Sw7 and Microsoft believe the datacentres will play a significant role in the future of Africa's markets.
"The SME sector has openly embraced the cloud as the advantages are significant and the barriers to engage low. The datacentres will reduce risk and reduce engagement friction in the mid and upper markets. Our corporate markets have been slow to engage , the datacentres will hopefully provide the catalyst we are looking for," Jones added.