Under the remit of its recently established Africa Transformation Office (ATO), Microsoft has announced new initiatives to accelerate the growth of 10,000 African startups and fast-track investment in Africa’s startup ecosystem over the next five years.
Microsoft’s recently launched global Founders Hub will now be available to African startups through the ATO. The Founders Hub is a self-service hub that provides startups with a wide range of resources, including access to mentors, skilling content, tools like Microsoft Azure and GitHub, and go-to-market and business support.
Microsoft is also creating new partnerships with accelerators and incubators across Africa, including Grindstone, Greenhouse, FlapMax and Seedstars to provide industry-based startups with access to markets, technical skills and funding opportunities. These partnerships will provide Africa startups with access to skilling programs, access to markets, including opportunities to co-sell with Microsoft, and access to technology, with support from Microsoft’s engineering and product teams for co-innovation opportunities.
To enable startups to rapidly scale using investment funding, Microsoft is establishing industry alliances and partnerships with venture capital investors that will facilitate access to $500 million in potential funding for African startups. This funding will come from a network of venture capital investors, who will dedicate a portion of their financial support to startups in the Microsoft network.
Microsoft has already established partnerships with several key venture capital investors, including Banque Misr, Global Venture Capital and Get Funded Africa, and the intention is to grow this network of venture capital investors in the next five years to increase funding and enable them to scale up and drive economic growth.
Africa’s startup market is booming
Microsoft believes the vibrant African startup market is well placed to become a cornerstone of the continent’s digital economy, supporting local innovation through relevant solutions to societal challenges.
“Investments into Africa’s startup ecosystem are growing at an exciting pace. According to the Organisation for Economic Co-operation and Development (OECD), there are more than 640 active tech hubs across Africa, accelerating innovation and creating employment, particularly among the youth,” says Wael Elkabbany, Managing Director, Microsoft Africa Transformation Office.
“However,” Elkabbany points out, “currently the African startup market represents less than one percent of total investments worldwide. This needs to change.”
He reveals that Microsoft’s endeavour to dramatically scale its impact will be driven by an overarching strategy with three key focus areas.
The Founders Hub
The Founders Hub includes opportunities for startups to sell to Microsoft’s corporate and enterprise customers. Microsoft will also support startups in geo-expansion activities, where startups can scale up by selling in new countries or regions.
“The Founders Hub allows Microsoft to engage with accelerators, incubators and tech hubs across the continent. Our partnerships with key African accelerators provide crucial support to accelerate growth-stage startups with their business development and market expansion plans,” says Gerald Maithya, Startups Lead, Microsoft Africa Transformation Office.
Partnerships with key startups
Microsoft will partner with B2B-focused startups, scaleups, “soonicorns” (businesses with the potential to become unicorns) and unicorns across a range of leading African industries, and those concentrated on working with SMEs.
“We understand that each startup is unique and exists beyond the limitations of a one-size-fits-all partnership model. This is why Microsoft will tailor each partnership to the needs of individual startups, providing support and access – whether to technology, markets and co-sell opportunities, funding or digital skills – to enable them to grow and contribute to the wider economic growth of Africa,” says Maithya.
The primary goal of these partnerships will be to provide support in one or more of the following areas:
- Access to technology: Spanning from the provision of cloud credits and developer and productivity tools like GitHub to access to Microsoft’s traditional partner ecosystem, technical support and enablement. This also includes contact with Microsoft’s engineering and product teams for the purpose of co-innovation.
- Access to markets: Including the opportunity to co-sell with Microsoft from the SME Marketplace and the ability to partner with Microsoft on expansion activities, together with access to relevant enterprise and government partners. Microsoft will empower startups to scale to new levels through geographical expansion into new countries and co-selling opportunities.
- Access to funds: Microsoft’s partnerships with venture capital investors will provide qualified startups with access to funding.
- Access to skilling enablement: Microsoft will provide a seamless, self-contained package of high-quality skilling content. From a single interface, startups will be able to access multiple technical, self-paced trainings, workshops, instructor-led sessions and virtual training. This platform will also offer growth learning tracks aimed at empowering startups to achieve more. As part of the engagement model to reach as many startups as possible, Microsoft will also be looking at partnering with government startup programmes, regional ecosystems of startups networks and associations, and accelerators.
Partnerships with venture capital investors
Microsoft is establishing partnerships with venture capital investors, primarily those with global reach and regional bases, who are interested in one or more regions within Africa.
“Our goal in establishing these partnerships with venture capital investors is to extend the network of potential partnerships between Microsoft, venture capital investors and startups, thereby increasing the funding made available to eligible startups,” continued Maithya.
Elkabbany concludes, “There is huge potential for Africa to become a thriving hub of digital innovation on the global startup landscape. Our ambition is to see an explosion of the local invention that will contribute positively, not just to Africa’s digital economy, but to global society.”