15 African countries ranked among the top 100 global tech ecosystems

The top three tech ecosystems in the top 30 global ecosystems and 10 runners-up ranking have maintained their positions from 2020, with Silicon Valley remaining at the top, followed by New York City and London tied at number 2, according to a 2023 report by Startup Genome.

Los Angeles has risen to number 4 and Tel Aviv to number 5, while Boston and Beijing have both slipped out of the top five to number 6 and number 7 respectively, losing two positions each.

Singapore, recording the biggest improvement in the ranking, entered the top 10 for the first time, moving up an impressive 10 places to number 8 from number 18 in a 2022 report. The ecosystem increased 100% in the count of exits over $1 billion to a total of four.

According to Startup Genome, the 30 + ranking “identifies ecosystems that are more mature than other ecosystems globally, featuring a higher number of exits over $50 million and more funding activity.

No African ecosystems made it into the top 30 + runners-up ranking, but Cairo, Nairobi, Lagos and Cape Town made it to the Top 100 emerging ecosystems – startup communities at earlier stages of growth.

In a report by StartupBlink, however, Lagos – at 82 (and dropped one place from 81) – is the first and only African city ranked among the Top Cities in the Global Startup ranking, while South Africa (53), Mauritius (61), Kenya (62), Nigeria (64), Egypt (67), Ghana (77), Cape Verde (78), Senegal (82), Namibia (88), Tunisia (91), Morocco (93), Rwanda (95), Uganda (96), Angola (97), and Somalia (98) are the African countries ranked in the Top Country list.

The results in Africa and the Middle East are more positive, as the number of cities representing the region increased to 63, compared to 57 last year.

StartupBlink

In StartupBlink’s Top Cities list, San Francisco leads all other startup ecosystems worldwide, and New York remains a runner-up, while London follows in third place.

On a regional basis, two dominant regions, North America and Europe, saw their combined share drop from 72.4% last year to 70.1% this year, while the two smallest regions, Latin America & Caribbean and Middle East & Africa, increased their combined share among the top 1,000 from 11.7% last year to 14% this year.

The Middle East and Africa region gained a new ranked country (Uganda at the 96th spot) and has a total of 23 countries ranked in 2023.

South Africa’s decline means that no African country is ranked among the global top 50. At the city level, the results are relatively positive for the region: in 2022, 57 cities in the global top 1,000 (5.7%) were from the Middle East & Africa, this year the number is 63 (6.3%), 14 of which are from a single country, Israel.

The region experienced net gains of 3 cities both in the 101-300 range and the 301-1,000 range. 33 of the cities in the region ranked in the global top 1,000 improved their rankings, while 20 decreased.

The region’s top 5 list has two new members this year: Bahrain and Mauritius replaced Nigeria and Kenya as 4th and 5th regionally. Israel, United Arab Emirates and South Africa are the top 3.

Highlights of the top-ranked tech ecosystems by value

Ecosystem Value: A measure of the economic impact of the ecosystem, calculated as the total exit valuation and startup valuations over a two-and-a-half-year time period.

Startup Genome

Asia:

• Venture capital funding in Asia dropped by 31% compared to the record-setting numbers of 2021, from $102 billion to $70 billion. 
• Its early-stage funding deal count was also largely stable, showing just a 4.9% decrease from 2021 to 2022.
• India, one of the most valuable in the region, produced 24 new unicorns in 2022, a 33% decline from 2021’s 26.
• Seven Asian ecosystems (Beijing, Singapore, Shanghai, Seoul, Tokyo, Bengaluru-Karnataka, Delhi) are in the top 30 ranking, with a further three in the runners-up.
• Beijing is the regional leader in ecosystem value (measured by economic impact) – $756.58 billion.
• The top five ecosystems (Beijing, Shanghai, Seoul, Bengaluru-Karnataka, Shenzhen) are collectively worth $1,570 billion.

Europe:

• In 2022, the amount of early-stage funding in Europe was down 15% from the year before, but the average early-stage deal amount was up by 7% due to a significant reduction in the number of deals, just 75% of 2021’s number. 
• London remains #1 in Europe and has the most companies valued over $1 billion in the region.
• Berlin moved up to #13 overall and #2 in Europe. The German capital minted five new unicorns in 2022, increasing the total count from 14 to 19. 
• Amsterdam holds steady at #14 overall and #3 in Europe.
• London is the regional leader in Europe and is valued at $363.68 billion.
• Cumulatively, the top five ecosystems by value (London, Paris, Berlin, Stockholm, Amsterdam-Delta) are worth $770.86 billion.

Latin America:

• In 2022, venture capital funding cooled in Latin America after a year of tremendous growth in 2021.
• The region experienced a 5% decline in early-stage funding amount. However, total funding for 2022 still exceeded that for all the tracked years prior to 2021 (from 2018), indicating that the region is faring well over the longer term.
• At #26, São Paulo is Latin America’s only ecosystem in the top 30. From 2020–2023, the ecosystem has risen four places, from #30 to #26.
• São Paulo is the regional leader in Latin America valued at $122.88 billion.
• The top five ecosystems (São Paulo, Mexico City, Bogota, Buenos Aires, Santiago-Valparaiso) are collectively worth $176.15 billion.

MENA (Middle East and North Africa):

• In the period 2018–2022, MENA saw a 96% rise in early-stage funding amount, a 28% growth in Series B+ deal count, and an impressive 113% increase in Series B+ deal amount.
• MENA largely held steady from 2021 to 2022, with only a slight decrease in the amount of early-stage funding (-5%).
• Tel Aviv remains the region’s leading ecosystem and is thriving. It moved from #7 in the rankings, where it had sat since 2020, to #5. Its Ecosystem Value grew by 100% ($235 billion) from July 1, 2019–December 31, 2021 to July 1, 2020–December 31, 2022., buoyed by several exits over $1 billion.
• The number of unicorns has also risen considerably, with a massive 33 new entrants bringing the total to 57.
• Collectively, the top five ecosystems (Tel Aviv, Dubai, Riyahd, Cairo, Abu Dhabi) are valued at $277.34 billion.

North America:

• North America experienced a decline in overall deal activity from 2021 – Series B+ deal amounts dropped 41% (from $203 billion to $120 billion) and Series B+ deal count 24% (from 2,647 deals to 2,006). Early-stage funding dropped by 26% and Series A deal count by 25%.
• North America is still the world’s leading startup nation, making up 50% of the top 30 plus runners-up ranking.
• In the period 2018–2022, North America experienced only a 4% increase in Series B deal count, but a 56% growth in Series B+ deal amount.
• The number of early-stage funding deals has been decreasing since 2018, and in 2022 was 28% below that year’s count, while the early-stage funding amount has increased by 26% from 2018 to 2022, highlighting the general trend of inflated values in this period.
• Silicon Valley continues to dominate the rankings.
• Collectively, the top five ecosystems (Silicon Valley, New York City, Los Angeles, Boston, and Seattle) are valued at $3,957.68 billion.

Oceania:

• Oceania experienced a 60.7% increase in early-stage funding amount over 2018–2022, the highest of any global region for this period.
• After enjoying significant growth in 2021, Oceania experienced declines on multiple fronts in 2022: 31% year-on-year decline in Series B+ deal amount, 10% decline in the number of Series B+ deals, and 13.6% decline in early-stage funding amount.
• Oceania experienced a 152% increase in Series B+ deal amount, 81% increase in Series B+ deal count, and 60.7% increase in early-stage funding amount over the period 2018–2022, the highest of any global region for this period.
• Sydney has maintained its top position as the highest-ranking ecosystem in Oceania, tied at #21 with Bengaluru-Karnataka. 
• Collectively, the top five ecosystems (Sydney, Melbourne, New Zealand, Brisbane, Adelaide) are valued at $122.14 billion.

Sub-Saharan Africa:

• While some other regions struggled to get close to their success of the previous year, funding in sub-Saharan Africa decreased only slightly in 2022. 
• Sub-Saharan Africa increased 227% in early-stage funding amount and 43.8% in early-stage deal count from 2018 to 2022.
• Early-stage funding declined 5.9%, early-stage funding amount by 6.7%, the number of Series B+ deals was equal, and Series B+ amount fell just 3.7%.
• Fintech is the highest-performing sub-sector in sub-Saharan Africa, comprising 41% of total technology startup deals in the period 2018–2022. 
• Lagos is the regional leader and is valued at $8.43 billion.
• Lagos, Nairobi, Cape Town, Dakar, and Accra are valued at $21.6 billion.

Lessons

Apparently, the tech ecosystems of the world are constantly evolving, and it is fascinating to see how they compare to each other. Some of the most important factors that contribute to the success of a tech ecosystem include the availability of capital, the strength of the startup ecosystem, the level of government support, and the quality of the talent pool.

By the numbers, we have seen that there is no one-size-fits-all approach to building a successful tech ecosystem. However, there are some common factors that all successful tech ecosystems share. These include a strong focus on innovation, a supportive regulatory environment, and a vibrant startup community.

The future of the tech industry is bright notwithstanding its current funding status, and it will be interesting to see how the tech ecosystems of the world continue to evolve in the years to come.

Challenges for tech ecosystems to overcome:

• The importance of diversity and inclusion in tech ecosystems.
• The role of government in supporting tech ecosystems.
• The challenges facing tech ecosystems in developing countries.
• The future of the tech industry and the impact it will have on the world.