The Innovation Hub is looking to build Africa’s next unicorn start-up business, according to CEO Bangani Mpangalasane.
Commonly used in the venture capital (VC) industry, the term ‘unicorn’ refers to a privately-held start-up company with a value of over $1 billion, according to Investopedia. Unicorn investors tend to be private investors or VC firms.
While SA’s start-up ecosystem has made some gradual improvements over the years, with notable tech businesses like SweepSouth, Takealot and Yoco making waves, home-grown start-ups that fit the unicorn status are still mythological.
Speaking to ITWeb TV recently during a wide-ranging interview about the local start-up space, Mpangalasane acknowledged that unicorns aren’t coming from SA.
This, he noted, is because some of the “big ideas” from the country end up being sold to large corporations in the early stages.
“This is why we are challenging ourselves to build those unicorns, because that has huge impact in terms of economic development and industrialisation in a country.
“We’ve realised that because of potential growth in the Western countries, whereby a start-up will come up with a brilliant idea and when that idea is pitched and considered very commercially-viable, then you’ll see big corporations buying into those businesses or buying them out.
“The situation we have is that our start-ups tend to sell their ideas and then it seems as if we don’t have brilliant ideas coming from Africa – this is one of the things we are working on as the Innovation Hub. We’d like to see one of the start-ups from the Innovation Hub, from South Africa, disrupting the world.”
The Innovation Hub is a subsidiary of the Gauteng Growth and Development Agency and an agency of the Gauteng Department of Economic Development – entities strategically tasked with driving technology innovation in Gauteng.
According to Mpangalasane, the hub is striving to become a vibrant science and technology park that activates economic development through innovation. It focuses on providing a platform for start-ups in the digital economy, bio economy and green economy, particularly those in the townships.
Additionally, it serves as an incubator for those start-ups and SMMEs with ideas that have the potential to be commercially viable, providing support from idea, product development and intellectual property registration, to commercialisation.
“We’ve had start-ups from the digital economy, where they’ve developed digital applications for the public and private sectors. In the bio economy space, we can use the example of Portia M, but there are quite a number of them…ensuring the products they are developing are commercialised.”
Mpangalasane said that since joining the hub in April last year, he has noticed there are lots of efforts in the innovation space, but a more collaborative approach is required to drive impact.
“Although we might be in a provincial set-up, we do have collaborations with national departments, other state agencies in the innovation space. I do believe we need to have more efforts in collaboration, so that our resources and efforts are aligned, and we can have an impactful outcome in the communities that we serve.”
Innovation Hub CEO Bangani Mpangalasane. (Photograph by Lesley Moyo)
South Africa has two major start-up cities. Cape Town, which is home to several tech heavyweights, has often emerged as the start-up and tech hub in the Sub-Saharan Africa region.
However, StartupBlink’s latest Global Start-up Ecosystem Index shows Johannesburg has surpassed Cape Town as the top-ranked city in the South African start-up ecosystem.
According to the index, Johannesburg has the highest growth rate in SA at 42%, climbing 17 spots globally to rank 122nd. Cape Town has a slower growth rate at 13%, compared to Johannesburg. It also fell 10 positions to 138th place globally.
Mpangalasane pointed out that he does not view the Cape Town versus Johannesburg narrative as competition, but is rather focused on building a relationship of working together.
“We recently had very progressive discussions with the agency in the Western Cape that deals with economic development; their set-up is not exactly like the Innovation Hub.
“There are synergies in terms of the programmes they run and what we do…the discussion is not about competition. The circumstances are different, as the focus of Gauteng is mostly on township revitalisation and their focus is different in nature, but there are synergies. We are working towards building a relationship so that we can share their strengths and vice versa, leveraging on each other.”
