Cape Town has been ranked among the world’s fastest growing regions for foreign direct investment, according to a report by fDi Intelligence, a data division of the Financial Times Group.
The ranking also gave South Africa the top spot in South Africa for its economic potential, start-up status and business friendliness.
In addition to receiving the highest number of foreign direct investment (FDI) projects in the software and IT services sector, South Africa also recorded the second highest number of start-ups, after Nigeria.
Cape Town took second place after Cairo for FDI strategy after showing impressive initiative in creating the infrastructure necessary for a thriving tech ecosystem.
“Stretching beyond Cape Town, the Western Cape has a robust technological ecosystem,” said Wesgro, the official Western Cape tourism, trade and investment promotion agency.
“The Cape Town – Stellenbosch corridor contains 450 tech companies employing over 40,000 people, making the ecosystem larger than Nairobi and Lagos combined.”
Other key aspects that make Cape Town the ‘Tech Capital of Africa’ include:
- Technology start-ups: By the end of 2020, there were 550 tech companies and over 40,000 people employed in the tech sector in Cape Town.
- Investments: In 2020, a total of $ 88 million (1.2 billion rand) of disclosed investments was injected into tech start-ups in Cape Town through 46 deals, the highest investments made in South Africa.
- Capital risk company: The Western Cape has the largest number of venture capital firms, making it easy for startups to access funding.
- Coworking spaces: The Western Cape has more than 30 coworking spaces, the highest in Africa and 715 free WiFi spots in Cape Town alone.
- Developer talent: Cape Town hosts 38% of total developers in South Africa, the highest concentration of developers in the country.
- Coffee culture: Cape Town has a deep and diverse coffee culture in hundreds of stylish outlets.
- EdTech Hub of Africa: Cape Town has a high density of digital skills training academies and is the location of choice for EdTech companies creating content for entities and educational institutions around the world.
- Home to four world-class universities: The University of Cape Town has retained its place as Africa’s top university, with Stellenbosch University ranked 3rd best university in the 2021 Times Higher Education (THE) World University Rankings. Students from all over the world come to Cape Town to study, and many are drawn to the growing tech ecosystem.
- The ease of doing business: According to the World Bank’s latest research report on Doing Business in South Africa, Cape Town ranked the top metropolitan municipality in the country for ease of doing business.
Cape Town also has a number of successful start-ups that showcase the diversity of emerging companies in the sector, including Aerobotics, a drone data analytics company that helps farmers gain deeper insight into their yields and land use, and Jumo, a business. that facilitates digital financial services such as credit and savings in emerging markets.
Others are Yoco, a point-of-sale payment provider for small businesses, and Sweepsouth, a company that formalizes employment in the informal sector, and many others.
“The ranking of the fDi Intelligence report is a boost of confidence in the digital and technological sector and proof that the efforts of the Government of the Western Cape, with our partners in Cape Town and Wesgro, are achieving the desired outcome, ”said Western Cape Finance and Economic Opportunities Minister David Maynier.
“Attracting foreign direct investment to support job creation is essential for our economic recovery in the Western Cape.”
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