The Evolution of Tanzania’s Startup Ecosystem: Reflections from the Western Cape
Having just returned from the VC4A Africa Early Stage Investor Summit in Cape Town, I’m buzzing with excitement and optimism. My two main goals for the trip were to open investor doors for our Mastercard Foundation EdTech Fellows and to connect with fellow angels and ecosystem partners. Oh, and speaking of angels, next week I’ll be signing my third SAFE agreement with a startup. Yes, folks, I’m officially hooked on this angel investor life—it’s addictive, to say the least.
But back to the topic at hand: the evolution of Tanzania’s startup ecosystem.
This year’s summit had what may well be the largest Tanzanian delegation I’ve seen to date—startups, investors, and ecosystem enablers all proudly representing. For those of us who’ve been in the trenches, building and witnessing this ecosystem from its roots, it’s clear we’ve come a long way.
From Nascent to Nifty: A Brief History
Let’s rewind to 2017. Back then, the World Bank published a study mapping Dar es Salaam’s startup ecosystem as being in its “nascent” stage. Think of it as the scrappy toddler years—full of energy but lacking structure. Fast forward to today, and we’re miles beyond that, with new actors like Serengeti Business Angels, Warioba Ventures, and Ennovate Ventures breathing fresh air into the scene.
Every startup ecosystem goes through phases of growth and transformation. Ours has had five critical ones so far:
1. The Origin Phase: Where it all began—ICT activities led by telcos, coding communities, public telecenters, and internet cafes. Was it a true ecosystem? Probably not. It lacked the intricate value exchange and relationships we see today. But it planted the seeds.
2. The Nascent Phase: Around 2012-2013, something resembling an ecosystem started to take shape. Meetups, hackathons, and World Bank-funded bootcamps began fostering interactions between players. We were like kids playing with shiny new toys, experimenting without much thought for sustainability.
3. The Cool Phase: By now, everyone wanted in. Corporates, donors, and even campus initiatives joined the bandwagon. But this phase came with a reality check: many hubs and initiatives without solid business models collapsed. Cue tough lessons in sustainability.
4. The Politics Phase: This was (and remains) a critical turning point. Policies, laws, and advocacy entered the chat. The Tanzania Startup Association was born, pushing for an innovation-friendly agenda. RIP Dr. Faustine Ndugulile, who passionately pitched the startup concept to Parliament. Political credit-grabbing sometimes overshadowed progress, but hey, even Elon Musk battles policy hurdles.
5. The Maturity Phase: Ah, the sweet signs of maturity. Today, we’re seeing focused new entrants, cross-border collaborations, and better pipelines of quality startups. Seed funding sizes are improving, valuations are becoming realistic, and foreign investors and founders are eyeing Tanzania as the next big thing.
Lessons Learned Along the Way
Through all these phases, one thing has become clear: ecosystems aren’t built overnight. Silicon Valley took over 60 years to become what it is, and it’s still evolving. For Tanzania, we’re learning to embrace our unique trajectory, driven by resources, talent, and market dynamics.
I vividly recall the days of reading the “White African Blog,” marveling at Nairobi’s iHub and BRCK stories while figuring out what was possible for us. It wasn’t smooth sailing—our ecosystem felt more like a series of isolated islands than a connected whole. Yet, bit by bit, the pieces came together.
Where We Are Now
The current signs of progress are impossible to ignore:
The ecosystem is moving from endless talk to actionable, transactional activities.
Foreign players are joining the mix, competing for high-quality businesses.
The startups themselves are diversifying across sectors, with stronger pipelines and bigger ambitions.
Cross-border interactions are increasing, signaling that Tanzania isn’t just playing catch-up anymore—we’re shaping up to lead.
Of course, there are still challenges. Some actors are stuck in past phases, clinging to ecosystem politics or fostering unnecessary competition. But the momentum is undeniable.
The Road Ahead
Tanzania’s startup ecosystem is no longer just a dream—it’s a movement. As someone who’s gone from student to employee, founder, entrepreneur, and now investor within this same ecosystem, I can confidently say that exciting days lie ahead.
To my fellow ecosystem builders, partners, and angels: keep pushing, keep learning, and keep growing. Our neighbors can smell what we’re cooking, and trust me, Africa isn’t ready for what Tanzania is building.
Let’s keep the fire alive and the ecosystem thriving. See you on the other side of greatness.
