This survey looked into everything there is to know about the South African tech start-up industry. Traditionally, its’ been Cape Town in the lead in relation to start-ups in SA, but that trend is gradually shifting. Cape Town however is still most successful compared to Gauteng.
Sponsored by Telkom Futuremakers, the Ventureburn survey reported that 36% of Western Cape start-ups saw significant profit revenue compared to a 22% in Gauteng. Black tech start-up rose by 56% this year compared to 26% in 2015. The survey revealed that white owned start-ups saw a 15% turnover profit whereas it sits at 7% for black counterparts. In regard to all start-ups that seek venture capital, only 8% are successful. Half of the start-ups surveyed were mainly from three sectors, being the Software as a service (19%), Fintech and Insuretech (18%) and the Media and Marketing sector (13%).
The increase in Gauteng tech start-ups is said to be the result of the growing number of tech entrepreneurs who are black (black African, coloured, Indian or Chinese South African) and now make up 56% or over half of the country’s tech start-ups, up from 46% in 2017 and 26% in 2015.
The majority of the start-ups Ventureburn surveyed are run and founded by males aged between 25 and 50. Males run 65% of those start-ups surveyed, while 19% have both male founded their start-up in the last year. This is likely to be the reason that only a quarter say they operate from offices, while majority work either from home or remotely. Half of those surveyed own their own product or intellectual property (IP), while 38% are a service-orientated business (such as an agency or software development house). The remainder of start-ups are e-commerce businesses (8%) or license or use another’s product or IP (3%).
The survey further showed that although there is a rise in Black start-ups, these businesses struggled significantly. It found that those start-ups would run out of funds within three months. Over half or 51% of black start-ups surveyed (2017: 61%) generate no revenue at all, because they are still working on their concept or are in the seed stages of growth. Just 20% of white start-ups say they are yet to make money (2017: 30%).
The survey shows important findings in relation to new business ventures. Its’ findings show positive and negative impact in regard to economic growth. There still needs to significant participation by Black entrepreneurs into emerging markets. For a more comprehensive look at the findings of the Ventureburn statistics, please visit the www.bizcommunity.com