Why you should consider it:
Along with the idyllic lifestyle, Cape Town offers a foothold on the African market.
Who it’s good for:
Tech entrepreneurs who like outdoor living.
In a couple of years, it might become too saturated.
As Africa’s most advanced economy, South Africa has a good mix of international and homegrown companies. A combination of lifestyle, community, a culture of creativity, access to funding and the sun bring people looking to launch new businesses to Cape Town, in particular. The startup scene has stayed vibrant in spite of a challenging economic outlook, helped by municipal and private initiatives like the Cape Innovation and Technology Initiative, which offers financial and logistical incentives for new businesses in the city. The capital is packed with restaurants, wine farms, coffee shops and co-working spaces – all of which help to create the work-life balance that Cape Town is known for.
The innovation initiative
Joshin Raghubar, Chairman of the Cape Innovation and Technology Initiative (CITI)
When did you get involved with CITI?
‘I’ve been the chairman of CITI since its formation in 1999. I graduated from university in the mid-nineties, just when South Africa was emerging from apartheid, during which it was very isolated due to sanctions. So the late nineties was an incredible time; we were emerging from the darkness into this global, exciting new world. It was also when the second tech boom and the dot-com boom were happening.’
What is CITI’s goal?
‘We’re a non-profit that brings together academia, government and business by supporting the entrepreneurial ecosystem with incubation programmes; giving young people digital and tech skills and placing them into jobs – about 1,000 people a year; and picking sectors that we believe will be transformative in 20 years and stimulating them [through clustering, networking and funding].’
Why should an entrepreneur move to Cape Town?
‘There is an existing entrepreneurial ecosystem. In all measures, it is the number one tech ecosystem in Africa: it employs more people in tech than [its two competitors] Lagos and Nairobi combined. And it has the right base ingredients: great universities; a sophisticated, cosmopolitan culture; it’s a beautiful city – you can be in the mountains in the morning and the ocean in the evening; and it’s relatively cheap – to earn in dollars or euros and live in Cape Town is probably one of the best lifestyles anyone could have.’
Does the local government encourage the startup culture in any way?
‘The city puts a lot of money into organisations like CITI and Silicon Cape, which, in turn, support the city's entrepreneurial ecosystem. So, in many ways, the government creates a subsidised way to fast-track starting up your company.’
Catching the wave
Nick Dutton, co-founder of Mami Wata
Nick Dutton was born in Johannesburg but raised in England and, after working in advertising between the two, he moved his family to Cape Town, drawn by the city’s surf culture and idyllic lifestyle, to co-found Mami Wata in 2016. The surf label exudes a sixties nostalgia, mixed with a distinctly South African aesthetic.
Nick initially launched the label online but found that e-commerce in Africa isn’t as extensive as what he had experienced in the UK. ‘On our website, we were greeted with silence and realised we needed a pop up.’ He arranged a market stand to test the concept, before moving to a shop in the historic centre and giving people a holistic experience of the brand.
Among the challenges was finding the right local manufacturer. ‘A lot of Africa was hit by production moving to China. You’ve got brands like Levi’s in Lesotho. But when you’re small, you’re not at the sort of scale to be able to work with them. And while it's very possible to make good clothing here, it’s tough to make technical apparel for sports clothing.’
Yet Cape Town’s limitations are also its strengths. ‘Here you can work really quickly. Everything we’ve needed to create the brand is within four miles of the shop. And when you're in those early phases when someone is offering you a sample, you can drive to go and see them.’
Find more of the top cities for starting something new in 2021.
This article was first published in Courier Issue 37, October/November 2020. To purchase the full issue or become a subscriber, head to our webshop.