Looking for funding for your start-up? This is how much you can expect to get in Cape Town vs Johannesburg
New data in the Global Start-up Ecosystems report for 2017 reveals how much early-stage funding the average start-up in Cape Town and Joburg can expect.
The report, which analyses start-up environments in major cities across the world, found that Cape Town lives up to its title of being the start-up capital of South Africa, where, despite having a much smaller ecosystem value than Johannesburg, entrepreneurs can find almost double the funding.
Cape Town based start-ups, on average, draw around $20,100 (R254,000) in early stage funding, compared to Johannesburg start-ups which draw $10,400 (R131,000).
This is despite Johannesburg’s start-up ecosystem being valued almost eight times higher than in Cape Town.
Johannesburg’s ecosystem value (start up valuations, plus the exit value of start-ups in the city) is pegged at $1.36 billion (R17.2 billion), compared to Cape Town’s $172 million valuation (R2.17 billion).
Looking at the global start-up ecosystem, however, South Africa is still far out of its league. The global average for early stage funding is over $252,000 (R3.2 million) – while the average ecosystem value is $40.1 billion (R506.6 billion).
The report noted, however, that the overall value of startup ecosystems is highly concentrated, with 11 of the 55 ecosystems in the report sample accounting for 78% of the global ecosystem value.
“These 11 ecosystems are in seven countries,” the report said.
Unsurprisingly, half of the ten best start-up destinations are in the United States, led by Silicon Valley and New York.
Other countries identified as top start-up destinations include the UK, China, Israel, Germany, France, Singapore, Switzerland, Canada, Australia, the Netherlands and India.
Read: Cape Town start-up selected for major Silicon Valley programme