Africa Tech Ecosystem: Lagos overtakes Nairobi as Africa’s top Startup City

The Global Startup Ecosystem Index 2021 Report by StartupBlink indicates Lagos has overtaken Nairobi to become Africa's top startup city.

The Global Startup Ecosystem Index 2021 Report by StartupLink indicates Lagos has overtaken Nairobi to become Africa’s top startup city.

Lagos, the commercial capital of Nigeria has overtaken Nairobi, Kenya to become Africa’s top startup ecosystem. This is according to the Global Startup Ecosystem Index 2021 which was released by StartupBlink. The report ranks Lagos 122nd globally, overtaking Nairobi, Kenya, which now ranks 136th globally.

StartupBlink is the world’s most comprehensive startup ecosystem map and research centre, working to uncover the momentum of startup ecosystems globally and to accelerate their growth.

Once a year, StartupBlink releases the Global Startup Ecosystem Report, ranking the Startup Ecosystems of 1,000 cities and 100 countries to provide free quality information for startup founders so they can make intelligent decisions about relocation and the right place to build their startup.

The report is built using hundreds of thousands of data points processed by an algorithm that takes into account several dozens of parameters including the number of startups, the size of the domestic market, the ease of doing business amongst others.

Global-View

The top 5 countries which include United States, United Kingdom, Israel, Canada and Germany have all maintained their rank from last year despite the global pandemic that affected these economies adversely. Notably, Israel, which had taken 3rd spot from Canada has maintained its momentum at #3 and Germany, which took a giant leap from 9th position to 5th position in 2020, has also maintained its position at #5.

Outside of the top 5, a notable change is China taking the 7th spot, jumping from the 14th spot. In 2019, China was not a part of the top 20 and it is astonishing how the country rose into the top 10 in just 2 years. Brazil dropped from the top 20 spots to now rank 24th in the world.

The UAE is now ranked 25th globally and had one of the most impressive rank increases this year, coming from the 43rd spot in 2020. Taiwan is now ranked 26th globally coming from the 30th spot.

San Francisco and New York remained the top two startup ecosystem cities in the world compared with the report of last year. San Francisco, being referred to as the “supernova” of startup ecosystems, scored 328.96, while New York scored 110.77.

Notably, Beijing came from the 6th spot to take the 3rd spot in 2021. The report stated that the sheer market size of China and its unique political and civil structures allowed it to build successful and isolated ecosystems, with advantages in data gathering, AI, and other sectors that are all responsible for its growth. London, ranked 5th, is facing a challenging environment. Since 2017, it stood its ground as the 3rd ranked ecosystem globally.

The Middle East and Africa

The Middle East & Africa region has a total of 74 startup ecosystems represented in the global top 1000 cities ranking, spread across 22 nations in the global top 100.

Israel remains the main player in the region by a significant margin, with Tel Aviv and Jerusalem taking 8th and 54th globally and 1st and 2nd regionally, respectively. In fact, three of the top 4 ranked cities in the region are in Israel, with Haifa taking 3rd.

Elsewhere, the region has seen significant positive momentum, with the United Arab Emirates increasing 18 places to 25th globally and 2nd in the region, and South Africa moving up 4 spots to 48th, becoming the first African country in the global top 50.

There is a general feeling of positive momentum in the region, with countries such as Kenya (61), Nigeria (63), Jordan (64), and Bahrain (66) moving further up in the rankings, while we see the national ecosystems of Namibia (99), Ethiopia (100), and Mauritius (73) feature in the rankings for the first time.

Top Countries

RankCountryNumber of
Ranked Cities
Global
Rank
Rank Change
(from 2020)
Total Score
2021
1Israel113--27.741
2United Arab Emirates325+186.951
3South Africa448+43.518
4Kenya261+11.565
5Nigeria763+51.517
6Jordan164+31.108
7Bahrain166+90.946
8Rwanda169-40.918
9Egypt270+110.893
10Saudi Arabia471+170.864

At the city level, this year has seen UAE’s significant growth led by both Dubai, ranking 67th globally and 3rd in the region, and Abu Dhabi, increasing 146 places to 169th.

Lagos, Nigeria has also seen a positive momentum, increasing 5 spots to 122 globally and taking 5th position in the region, preceded by the Israeli city of Haifa, which increased 24 spots to take 4th in the region. By climbing to the 5th position in this region, Lagos became the highest-ranking African city, at the expense of Nairobi, which is now ranked 136th worldwide, 6th in the Middle East and Africa region, and second in Africa.

Within the Middle East & Africa region, there are some differences among the sub-regions. 2021 has been a very positive year for the Middle East, in which all but one country kept or improved rank, and some countries saw impressive jumps. African countries have had more mixed results.

Within Africa, there are also differences among sub-regions. Central Africa still has no representation in the rankings, while Eastern Africa grew from 4 to 6 countries in the global top 100.

Northern Africa kept its three representatives in the global top 100, yet two of the three nations (Tunisia and Morocco) declined in rank. Southern Africa had a good year; not only did South Africa join the global top 50 this year, but a second Southern African country (Namibia) joined the rankings.

Finally, Western Africa had a good year, where all ranked countries (Nigeria, Ghana, and Cape Verde) improved their rankings. To sum up, results are quite diverse across the sub-regions of the African continent.

Top 20 Ranked Cities

RankCityCountryGlobal RankRank Change (from 2020)Total Score 2021
1Tel Aviv AreaIsrael8−127.084
2JerusalemIsrael54+17.776
3DubaiUnited Arab Emirates67+326.883
4HaifaIsrael119+244.777
5LagosNigeria122+54.693
6NairobiKenya136−204.277
7Cape TownSouth Africa145+14.047
8JohannesburgSouth Africa152+83.864
9Abu DhabiUnited Arab Emirates169+1463.188
10CairoEgypt180+212.732
11RiyadhSaudi Arabia192+892.415
12AmmanJordan201+22.088
13Beer ShevaIsrael238−391.490
14KigaliRwanda265−391.210
15AccraGhana281+701.109
16YokneamIsrael284+121.089
17JeddahSaudi Arabia294+1431.004
18ManamaBahrain337+1030.732
19TunisTunisia341−580.722
20BeirutLebanon352−80.689

Nigeria

Nigeria is ranked 3rd in Africa and saw a notable increase from 68th spot to now rank 63rd globally. This was made possible because of its massive consumer market with more than 500 active startups which is one of the largest in Africa. In total, Nigeria has 7 cities in the global top 1000 and continues to have the highest number of ranked cities of any African nation.

Lagos has surpassed Nairobi and is now the highest-ranking city in Africa from ranking 127th to 122nd. Lagos has also ranked in the global top 50 cities for E-commerce & Retail Technology and in the global top 100 for both Transportation Technology and Education Technology.

Ibadan saw a massive increase in ranking, to rank 353rd globally and 2nd in Nigeria after beating Abuja. Abuja is ranked 3rd nationally and 466th globally, while Port Harcourt decreased to rank 906th. The newest Nigerian city in the rankings is Enugu which ranks 978th globally and 5th nationally. Benin City has increased to now rank 979th, while Kano is ranked 981st.

Notable Startups and Ecosystems that helped the growth of Nigeria in this ranking include PayStack, Flutterwave, VerifyMe and Mono.

Bottomline

Although Nigeria rose in the ranking, according to the index, the country faces some major challenges, such as a lack of financing options, unpredictable regulatory decision making and a lack of broadband internet infrastructure. Government entrepreneurship programs are present but need to be developed, as does legislation and public sector support.

 

StartupBlink’s Global Startup Ecosystem Index

As a startup ecosystem map and research centre, StartupBlink provides free quality information for startup founders and stakeholders so they can make intelligent decisions about the right place to build their startup. Their global startup ecosystem map has tens of thousands of registered startups, coworking spaces, and accelerators creating a robust sample of innovation worldwide. Their annual reports and ranking tables are used by hundreds of thousands of readers to inform decisions on relocation, investment and research.

American-Ghanaian digital content creator. Occasional guest contributor on technology and digital innovative stories from the African continent. Follow me on twitter: @AAsantewaa_

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