Why Cape Town is great for start-ups
8 July 2021
South Africa is Africa’s most advanced economy, with a good mixture of both international and local companies. Add in a combination of lifestyle, community, a culture of creativity, access to funding and sunny days, and it’s only natural for the City of Cape Town to draw in people looking to launch new businesses.
With initiatives such as the Cape Innovation & Technology Initiative (CiTi) offering financial and logistical incentives for new businesses, the city has managed to remain vibrant despite challenging economic outlooks.
The work-life balance is best expressed by the various restaurants, wine farms, coffee shops and co-working spaces located throughout Cape Town.
The innovation initiative
Joshin Raghubar, the Chairman of CiTi since its founding in 1999, states that CiTi is a non-profit aimed at combining academia, business and government by supporting the entrepreneurial ecosystem with incubation programmes; giving young people digital and tech skills and placing around 1 000 people in various jobs each year, as well as deciding on sectors which they feel will be transformative in 20 years and stimulating them through clustering, networking and funding.
When asked why entrepreneurs should move to Cape Town, he noted that there is already an existing entrepreneurial ecosystem which employed more than 40 000 people in tech by the end of 2020. He also stated that it has all the right pieces in place: great universities; a sophisticated, cosmopolitan culture; scenic views ranging from mountains to the ocean; and is relatively cheap, adding that, “To earn in dollars or euros and live in Cape Town is probably one of the best lifestyles anyone could have.”
Adding to this, Raghubar made note of the fact that the City puts a lot of money into organisations such as CiTi and Silicon Cape, which support the city’s economic ecosystem in return. He closed in saying, “So, in many ways, the government creates a subsidised way to fast-track starting up your company.”
Nick Dutton, co-founder of Mami Wata, spoke about Cape Town’s potential and how it helped his business flourish.
Born in Johannesburg and raised in England, Dutton worked in advertising in both locations before moving his family to Cape Town, drawn by the idyllic lifestyle and the city’s surf culture. It was here that he co-founded Mami Wata. Created in 2016, the surf label exudes a sixties nostalgia, which is mixed with an aesthetic that can only be described as ‘distinctly South African’.
Nick initially launched the label online but found that e-commerce wasn’t as extensive in Africa as it had been in the UK. He arranged a pop-up market stand as a test before moving to a shop in the city’s historic centre, providing people with a holistic experience of the brand.
One of the biggest challenges was finding the right local manufacturer, with Dutton noting that much of Africa was hit when production moved to China. He said that brands such as Levi’s existed in Lesotho, but that a small company is in no way able to work with them. He also added that, while it’s very possible to make good clothing, it’s tough to make technical apparel for sports clothing.
This is where Cape Town’s limitations are also shown to be its strengths. Speaking on this, Dutton says, “Here we can work really quickly. Everything we’ve needed to create the brand is within four miles of the shop. And when you’re in the early phases when someone is offering a sample, you can drive to go and see them.”
Along with its idyllic lifestyle, Cape Town also offers a unique foothold on the African market. Its unique location is appealing to many, especially tech entrepreneurs who enjoy outdoor living. With low costs and high financial returns, it’s easy to see that Cape Town is a fantastic choice for fledgling and well-established businesses alike. International investors looking to invest in Cape Town can email email@example.com for more information, while local businesses looking to make their mark can email firstname.lastname@example.org to find out more.