Morocco still trails far behind in Africa startups ecosystem

As at 2018, Morocco is home to no less than 24 accelerators, incubators, co-working spaces or other types of tech hubs with more than half located in Casablanca alone.

Among these, the work done by organisations like Numa Casablanca, New Work Lab, Jokkolabs, Enactus Morocco or LaFactory could be highlighted. It is also worth mentioning that more tech hubs should come to enrich and support the existing ecosystem.
Such obstacles are in a country where tech startups have the potential to employ young people to build the nation’s internal market, according to a World Bank appraisal for Morocco’s $50 million loan request to finance startups.

While investment in Africa’s startups is rapidly growing, the money going into that sector in Morocco still trails far behind other countries on the continent. In 2017 venture capital funding across Africa reached $560 million, according to Partech Ventures. South Africa was the leading investment destination, attracting $167.9 million in 2017, followed by Kenya ($147 million) and Nigeria ($114.6 million). By contrast, Morocco attracted just $3.9 million in venture capital in 2017, according to Partech.

The World Bank says Morocco still needs better access to capital, greater legal protections, and more business networks.
According to l’Economiste, however, innovative Moroccan project bearers have limited access to financial means to materialize their ideas.

Despite government-assisted initiatives to boost entrepreneurship and information technology-related projects, l’Economiste reports that only 10 percent of Moroccan start ups have had relatively easy access to capital funds.

The remaining percentage faces structural dysfunction in the institutions supposed to oversee the allocation of funds and an “incoherent public policy” that complicate access to investments for startups.

Risk-averse investors sometimes tell project bearers that they prefer to place their money in limited companies—where owners are responsible for their debts to the extent of investment—rather than in capital risk projects like startups, where there is a high risk of losing the money invested.

As innovation is highly correlated with risk-taking, l’Economiste noted, one consequence of Moroccan investors’ risk-averse attitude is that innovative but risky projects almost never get funded.

With the advent of information capital technologies and an increasingly digitized global economy, the newspaper added that Morocco’s financial markets should ease the funding process for startups and ensure the kingdom’s smooth and timely integration into the prevailing financial system.

“Mutual efforts are needed,” wrote l’Economiste, calling for collaboration between young innovators and investors to “change the [sector’s] current direction” and prepare Morocco’s technology sector for the challenges of the digitized economy.

Low innovative ideas by Morocco’s entrepreneurs

While competitiveness and innovation are overly used words in the entrepreneurial jargon in Morocco, it seems like most innovative enterprises are reproducing successful business models proven abroad, especially those from France. The original and untapped ideas have yet to find investors and incubators who are willing to believe in the entrepreneur, offer mentorship and above all fund the project. But despite the complexity of the markets and the scarcity of the resources available, young Moroccan entrepreneurs hustle to create their own jobs, stay in the market, bring value and participate in the development of their country’s economy. It may be a slow process- but Morocco’s entrepreneurs are eager to speed it up.
International organizations are also making their presence felt in the Moroccan scene, helping foster entrepreneurship and the entrepreneurship spirit by setting up competitions and grants. The British Council, the World Bank, the U.S Embassy, etc. provide opportunities for training new entrepreneurs and support their efforts to improve their conditions. These competitions, which are usually focused on themes such as social enterprise, innovation, education and environmental entrepreneurship, have projects that tend to have a tremendous impact on society. However, these programs are not usually widely promoted, and Moroccan entrepreneurs may not be aware of their existence.
Entrepreneurs with a few years under their belt also have to face a number of challenges as their businesses grow.

Mobile operators are helping startups ecosystem

Alongside tech hubs and investors, mobile operators (Maroc Telecom, Orange, and Inwi) are also playing an increasing role in the growing Casablanca and Morocco tech ecosystem.

While several start-ups we met over the week mentioned an on-going collaboration with Maroc Telecom, Orange and Inwi have put in place various initiatives and vehicles to engage and support the local tech ecosystem.

Other organizations positively impacting people’s lives by helping them start a business and benefit from a long-term support include INJAZ Al Maghreb, ENACTUS, Start Up Your Life and MCISE. However, the efforts remain insufficient for the population at large, which is in need of a well-rounded support to sustain their businesses in all regions of the country and sometimes beyond Morocco. Much of the support is focused on the promotion of entrepreneurship and the foundations of starting a business.

International organizations are also making their presence felt in the Moroccan scene, helping foster entrepreneurship and the entrepreneurship spirit by setting up competitions and grants. The British Council, the World Bank, the U.S Embassy, etc. provide opportunities for training new entrepreneurs and support their efforts to improve their conditions. These competitions, which are usually focused on themes such as social enterprise, innovation, education and environmental entrepreneurship, have projects that tend to have a tremendous impact on society. However, these programs are not usually widely promoted, and Moroccan entrepreneurs may not be aware of their existence.

Entrepreneurs with a few years under their belt also have to face a number of challenges as their businesses grow. While development and growth are the main concerns of these entrepreneurs, other cultural aspects also make it difficult for them to thrive quickly in the first years. Just like in most Arab cultures, the importance of having a solid and large network is what helps entrepreneurs ensure income in their early years. Accessing the bigger markets remains an unattainable dream for many, as transparency in tender applications still have a long way to go.

While competitiveness and innovation are overly used words in the entrepreneurial jargon in Morocco, it seems like most innovative enterprises are reproducing successful business models proven abroad, especially those from France. The original and untapped ideas have yet to find investors and incubators who are willing to believe in the entrepreneur, offer mentorship and above all fund the project. But despite the complexity of the markets and the scarcity of the resources available, young Moroccan entrepreneurs hustle to create their own jobs, stay in the market, bring value and participate in the development of their country’s economy. It may be a slow process- but Morocco’s entrepreneurs are eager to speed it up.



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