Culled from remarks by Aigboje Aig-Imoukhuede CFR, Chairman, Access Holdings & Coronation Group (www.Coronation.ng)
Gazelles. Camels. Elephants. In the language of venture capital, we have a full menagerie to describe a startup’s growth progression. However, in the past decade, the ultimate aspiration remains the unicorn: privately held companies valued at over $1 billion. Globally, there are approximately 1,200 unicorns across various industries, and while Africa’s list is smaller, it is growing. As of February 2023, the seven identified African unicorns predominantly operate in the fintech and digital sectors, addressing payment challenges across the continent.
For many startups in Africa, achieving unicorn status remains a distant dream due to structural challenges. To bridge this gap, governments and the private sector must foster ecosystems that nurture innovation and entrepreneurial growth at all levels.
Under ideal circumstances, gazelles—fast-growing companies essential for economic growth and employment—can mature into unicorns. These unicorns, in turn, can evolve into elephants: mega-companies that dominate markets. However, the key lies in cultivating gazelles first. Across Africa, there is a clear need to focus on five imperatives that can drive this transformation:
The private sector also has a crucial role to play. Africa’s world-class banking sector has already proven its ability to facilitate growth, whether through funding, strategic partnerships, or economic advisory. Collaboration with governments can provide the support startups need to achieve scale and sustainability.
Yet, achieving unicorn status comes with its own challenges: lofty revenue expectations, intensified scrutiny from regulators and competitors, and demanding boardroom dynamics. Recent economic events, including the pandemic and the “great market reset” of 2021/2022, further underscore the volatility. African startups must adopt disruptive approaches to not only achieve but maintain unicorn status on a global scale.
Successful startups demonstrate three critical attributes: a clear value proposition, a scalable business model, and an unmatched understanding of their target market. Combined with visionary leadership capable of executing plans at scale, these factors allow African companies to compete globally.
To vastly increase the number of gazelles—and by extension, the likelihood of unicorns—stakeholders must work together to overcome existing barriers. Governments, private sector players, and policymakers each have a role in redefining industries, creating jobs, and building Africa’s economic resilience. The path to success is challenging, but with deliberate efforts, Africa’s unicorns and elephants will reshape the future.
Distributed by APO Group on behalf of Coronation Group.