As South Africa’s innovation ecosystem matures, one reality has become increasingly apparent. Startups are no longer peripheral experiments on the margins of economic policy; they are now central to growth, job creation and global competitiveness. Yet, despite their growing importance, many founders continue to face structural barriers that slow their ability to scale, restrict access to capital and fragment the support systems designed to help them succeed.
The South Africa Startup Act Progress Report 2023/24, launched in 2024, offers a timely and necessary assessment of where the ecosystem stands today and what must change if startups are to move beyond survival towards sustained success. Its findings underline a simple truth: progress has been made, but it remains uneven, and without deliberate reform the country risks falling short of its entrepreneurial potential.
The report arrives at a symbolic moment. SiMODiSA, one of South Africa’s most influential ecosystem builders, enters its eleventh year of operation, marking more than a decade of active participation in shaping the country’s startup narrative. From early ecosystem mapping to founder advocacy and policy engagement, the organisation has remained a consistent voice for entrepreneurs navigating an often complex and uneven environment.
A decade of evolution in the startup ecosystem
Over the past ten years, South Africa’s startup ecosystem has undergone a notable transformation. The number of founders, incubators, accelerators, angel networks and venture capital funds has grown steadily. Technology-enabled solutions have emerged across fintech, healthtech, agritech, climate technology and enterprise software, positioning the country as one of the continent’s most active and visible startup hubs.
The report traces this evolution with a balanced lens, highlighting both progress and growing maturity. Today’s founders are more globally minded, ecosystems are better connected, and early-stage innovation is increasingly visible on international platforms. South African startups are no longer building solely for local markets; many are designing products and services with continental and global relevance from day one.
However, this growth has not been evenly distributed. Access to opportunity remains concentrated in certain regions and networks, while systemic challenges continue to limit scale for many promising ventures. The result is an ecosystem that is vibrant in pockets but inconsistent in its ability to support founders through the full lifecycle of growth.
Persistent gaps that continue to hold founders back
Despite the ecosystem’s expansion, the report underscores several persistent gaps that have yet to be resolved. Funding remains a significant bottleneck, particularly at the pre-seed and early growth stages where risk is highest and capital is hardest to secure. Many startups struggle to bridge the gap between initial proof of concept and sustainable revenue, a phase where traditional financing models often fall short.
Policy fragmentation also remains a major obstacle. Startups frequently fall between existing small and medium-sized enterprise frameworks and regulations designed for large corporates, leaving them ill-served by both. In the absence of a clear, startup-specific policy environment, founders are forced to navigate complex regulatory systems that were not designed with innovation-led businesses in mind.
Compounding these challenges is the lack of coordinated national support. While numerous programmes and initiatives exist, they often operate in isolation, resulting in duplicated efforts and uneven regional development. For many founders, navigating these gaps is not merely frustrating; it can be fatal to their businesses. Misaligned capital, inaccessible public procurement systems and policy discussions that exclude entrepreneurial voices continue to limit the ecosystem’s overall impact.
The report is unequivocal in its assessment: without a cohesive, startup-focused policy framework, individual interventions will continue to deliver only limited results.
What founders actually need
One of the report’s most valuable contributions is its founder-centric perspective. Rather than offering abstract recommendations, it reflects directly on what entrepreneurs say they need in order to build resilient, long-term businesses. These insights move the conversation away from well-intentioned but fragmented initiatives towards practical, systemic solutions.
Founders consistently highlight the need for predictable and transparent regulatory environments that reduce uncertainty and administrative burden. Easier access to early-stage capital, including blended finance models that recognise startup risk profiles, is also seen as critical. Equally important are clear and realistic pathways into both public and private procurement, allowing startups to become credible suppliers rather than perpetual pilot projects.
Beyond finance and regulation, founders emphasise the importance of practical business support that extends beyond short-term programmes, as well as stronger networks that connect them to markets, mentors and decision-makers. The message is consistent and clear. Startups do not need more isolated initiatives; they need systems that work together.
Collaboration as a catalyst for scale
A recurring theme throughout the report is the central role of collaboration. Sustainable ecosystem growth cannot be driven by founders alone. It requires intentional coordination between government, capital providers, corporates and ecosystem builders. When these actors operate in silos, startups stall. When they align, scale becomes possible.
In this context, the Startup Act is positioned not merely as a piece of legislation, but as a framework for alignment that recognises startups as a distinct economic category with unique needs. By creating shared reference points for policy, funding and support, the Act has the potential to unlock more coherent and effective ecosystem development.
This collaborative approach also strengthens accountability. By grounding advocacy in data and evidence, the ecosystem can move beyond anecdotal challenges towards measurable reform, ensuring that policy decisions are informed by the realities founders face on the ground.
Beyond programmes: shaping systems and narratives
SiMODiSA’s contribution, as reflected in the report, extends far beyond hosting events or running isolated programmes. Its work sits at the intersection of evidence-building, narrative shaping and policy advocacy. By consistently documenting ecosystem realities and translating founder experiences into policy-relevant insights, the organisation has helped shift the conversation from why startups matter to how they can be enabled to succeed.
This long-term, systems-oriented approach is particularly important in emerging markets, where startup ecosystems are still finding their place within broader economic strategies. By embedding entrepreneurship within national development narratives, ecosystem builders can help ensure that innovation-led growth is treated as a strategic priority rather than a peripheral activity.
Entering the next decade with purpose
As SiMODiSA moves into its second decade, its mission remains clear: to ensure that startups are recognised as a critical driver of economic growth, and that the environment surrounding them enables success rather than mere survival. The South Africa Startup Act Progress Report 2023/24 serves both as a reflection on the progress achieved and as a call to action for what must come next.
For South Africa, and for Africa more broadly, the question is no longer whether startups matter. The question is whether ecosystems will evolve quickly and coherently enough to support them at scale. As this report makes clear, the answers lie in collaboration, evidence-based policy and an unwavering commitment to founders who are building the future of the continent’s economy.