The British High Commission’s UK-SA Tech Hub has awarded a third round of funding, of an undisclosed amount, to support the SA Start-up Act Movement with regard to policy reform by local government, to assist high-growth start-ups in South Africa.
The UK-SA Tech Hub says to date, it has invested R2 million in SA’s tech start-up ecosystem.
The intent of the UK-SA Tech Hub is to help propel the efforts of the SA Start-up Act Movement, to spur local government to amend and implement policies that better support the exponential growth of South African tech start-ups – to the benefit of the entire economic ecosystem and job creation.
It is a collective effort by start-ups, investors, government and academia, calling for policy interventions that speak directly to entrepreneurs who own high-impact and scalable businesses in the country.
According to the movement, this third round of international investment by the UK-SA Tech Hub comes as South Africans are embracing a “new dawn” and the promise of a more stable policy environment, following the recent formation of the Government of National Unity (GNU) coalition.
It notes the GNU ultimately secured the significant amount of funding.
“Since 2022, our role to support SA’s high-growth start-ups – especially those in the tech industry or other fast-growing sectors that need stimulus to turbocharge innovation, development and growth – has been clear,” says Milisa Mabinza, director of the UK-SA Tech Hub.
“We identified the SA Start-up Act Movement and were very impressed by their work to date, leading to our investment in their own growth. Following the elections, we believe the GNU paves the way for more rapid change with regard to policy reform, given that a coalition government can effect changes more efficiently on a provincial level, and are pleased to be involved in such important legislative change.”
Identifying legislative hurdles
Launched in 2014, SiMODiSA – the SA Start-up Act Movement secretariat – has over the past 10 years sought to identify other legislative hurdles that hamstring SMEs’ ability to grow, by engaging with National Treasury and government, as well as other key stakeholders on red tape issues.
It has been advocating for visa reforms since 2014 and has been clear on its position that an influx of diverse, highly-skilled and innovative entrepreneurs would offer the country significant benefit.
The movement says the introduction of the digital nomad visa in May this year is a big win, opening doors for global tech talent to work in SA, fostering an even more divergent and skilled workforce.
“The digital nomad visa will go a long way toward addressing the critical skills shortages plaguing the country, especially in essential industries that require tech talent,” says Matsi Modise, chairperson of the SA Start-up Act Movement.
“Scarce skills, such as those in engineering, information technology, healthcare and finance, are in high demand, and high-growth start-ups offer potential job opportunities for these global workers, who, in turn, pass on their skills and knowledge to the local workforce.”
The SA Start-up Act Movement says it recognises that policy reform is at the core of creating a thriving SME ecosystem and has long advocated for the establishment of SA’s own Start-up Act.
“A dedicated Start-up Act would address the challenges faced by start-ups in the country and act as a foundation to support these businesses,” Modise points out.
“This would encompass providing legal protection for intellectual property, facilitating access to funding and investment, streamlining bureaucratic processes, and offering tax incentives to encourage entrepreneurship.
“It also clearly defines what a start-up is – currently the term is used as a panacea for those who have just opened their doors to high-growth unicorns. Government must be clear on the tiers of SMEs that exist in the country and base legislation that effects each level accordingly,” she says.
SA competitiveness boost
According to the movement, the need for a Start-up Act has become increasingly apparent as digital transformation continues to reshape industries and create new opportunities.
It notes that not only would it provide a more conducive environment for high-growth, scalable start-ups to thrive, it will also ensure SA remains competitive in the global digital economy.
It would have a far-reaching impact on attracting long-term investments, such as the UK-SA Tech Hub, which will support the country’s broader economic aspirations, it adds.
The UK-SA Tech Hub is hopeful the Start-up Act will be signed into law at a much faster pace, with the GNU at the helm.
“Over the past few years, the SA Start-up Act Movement has forged meaningful relationships at ministerial level, which we believe has led to the policy changes that have been achieved thus far. They deserve to take credit for this. We are confident in our decision to fund them for a third year consecutively,” says Mabinza.
“We are invested in the SA Start-up Act Movement for the long run and we want their goals to be realised and come into effect. We understand the enormous contribution SMEs make to the country's economic development.
“In addition, we believe in SA’s potential to regain its former status as ‘Africa’s Jewel’, and, through this third round of funding, look forward to being part of the country’s transformation towards that of enablement, empowerment and economic development and inclusion.”
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