by Réna Kakon. June 2022 (edited in January 2023).
Last week we celebrated one of the most impressive tech exit of all times in Africa + in the hottest and most strategic sector for governments: Artificial Intelligence 🎉 (I’m I the only one wondering why did Tunisia or the UK let that technology be acquired by a German company!?? ).
This is the perfect example of a startup success story bringing lots of pride and hopes home. A much needed positive note for Tunisia 🇹🇳 as people were in the street protesting against their president on the twelfth anniversary of the Revolution. It is a glooming period for Tunisia. So it’s even more remarkable to see entrepreneurs committed to make their country and talents shine globally! It creates a positive snowball effect by making Tunisian startups more visible to investors and encouraging early employees to start their own company and reinvest in the tech ecosystem 👏.
Back in June, I was in Tunis for 3 days. At that time, I was starting to raise funds for Kara Ventures with Jérémy Goillot to invest in early stage startups across Africa.
One of my first meeting was with AfricInvest’s team - wow such a lovely bunch of people ! An investor asked me : “of all the African tech hubs, why did you pick Tunis as your first destination to kick off your African tech tour? Don’t get me wrong I’m a proud Tunisian, but that is a quite unusual choice.” It was not at all a random choice - there are 4 main reasons I travelled to Tunis.
Raised in Morocco I had never travelled to another North Africa country, I was naturally drawn to discover Tunis’ rich history and culture.
😉 Intrigued by these entrepreneurs building from Tunisia products for the global market and making their home country shine - Expensya, NextProtein, InstaDeep. We all know tech is a good branding!
😅 Overlooked ecosystems are much easier to penetrate - let’s be real, it’s more efficient to connect with the top tech actors in Tunis in 3 days than in Lagos in a month. If we’re going to invest across Africa, we might as well start with countries where we have strong network.
💵 The Startup Act is an impressive initiative to encourage more Tunisian to launch their startups (labelled startups) or to invest in startups (fund of fund program administered by Smart Capital) - I was curious to see it with my eyes.
Quick facts about Tunisia
👨👩👧👦 Population: 12.2 million, of which 70% is urban, and 50% women
💹 GDP: 46.69 billion USD (ranks 26th/54 GDP per capita)
⚠️ Inflation rate: 10.1%
💼 Unemployment rate: 15.3%
😐 Minimum wage: 130€ - for 48hours week
💰 Currency: Tunisian Dinar (1€ = 3.33 Dinar)
👮♂️ Visa Free Country for European People ✅
🇹🇳 Distinctive fact: Tunisian revolution in 2011 leading to the Arab Spring
🏆 Higher private education penetration: 35% which makes it #1 African country
📲 Mobile phone penetration: 134% (i.e. total mobile connections according to GSMA - 2022).
🌐 Internet penetration: 66.7% of the population
🏦 Bank account penetration: 34.6% of the population (40% in urban areas, 22.4% in rural)
Distinctive Tech Initiatives
- The Startup Act I, enacted in 2018, was one of the first startup legal framework adopted by an African nation to (i) create an enabling environment for startups, (ii) support entrepreneurs with a monthly stipend, and (iii) attract General Partners through its fund of fund program administered by Smart Capital. A report is published every year.
- The Startup Act II is expected but it has been hard to get things done at government level. The challenge is to attract more international talents, experts, and capital!
- The Dot, Tunis’ digital innovation hub - a mini Station F! I spent an afternoon with Safa Majdoub. She welcomed me at the Dot, introduced me to entrepreneurs and investors, and shared her insights about Tunisian’s tech scene. This is the one stop shop for everything startups in Tunisia. There are also some scale ups looking to expand to Tunisia, like Glovo.
- AI Hack Tunisia. Leading AI event in Africa and MENA which held in Tunisia in 2022. AI Hack is the result of a collaboration between InstaDeep and Google. AI & ML are strategic sectors in which companies and government want to have a competitive advantage. Ensuring that African talents can remain competitive in this field and contribute is critical - AI is trained with data, so you want diverse perspectives ! Another African company, Zindi, is contributing to this revolution and establishes itself as the largest data scientist community in Africa.
- Taking a step back by looking at North Africa which emerged in 2022 with a +62% YoY ($1.1bn raised) and was marked by mega rounds (InstaDeep in Tunisia, Yassir in Algeria, and other unannounced); and its first tech exit : InstaDeep 🎉 .
- + 50 startups raised more than $100k between 2019-2022, according to the Big Deal’s data 😵 alright not quite a tech hub…
Founder’s Interview - Zohra Slim, InstaDeep
InstaDeep is advocating for the adoption and democratization of AI, rooting for AI & ML literacy of African talents, while developing applications for biotech, railways, banks, and tech giants! I really wanted to meet them and hear their story.
Z welcomed me in her office for a casual chat about entrepreneurship, human capital management, and the use of technology. Here are the cliff notes.
- Little they knew that they’ll be pioneering AI & ML. Zohra was a freelance web-developer who worked in India before coming home to look for a job. She met Karim in 2014 in Tunis. They started working on a few freelancing project before launching InstaDeep. None of them is an AI or ML engineer by background, although Karim studied applied mathematics.
- Building a world-class decision-making AI & advanced machine learning company. They had faith that the future of technology involved deep tech AI and there was a need for democratized AI & ML. The “ahaha” moment (aka product market fit) was about 4 years in, at the 2017 Mobile World Congress.
- There is no such thing as a part-time entrepreneur. It took about 3 years to get to Series A and about 4 years to get to Series B. Becoming a world class AI & ML company doesn’t happen over night. Zohra believes that if you really want to build a company, there is no part time job possible, no back-up plan, you just need to jump.
- African AI & ML powerhouse. InstaDeep publishes educational materials & researches and leads initiative such as Deep Learning Indaba and AI Hack to grow the African talent pool of AI & ML professionals. They relocated their HQ in London to facilitate fundraising but they intentionally grew their African presence with offices in Nigeria, South Africa, and of course their main office in Tunisia - building an African AI & ML powerhouse listed on the AI100.
In only 3 days in Tunis, I truly felt that this country as an incredible potential and is home of thriving entrepreneurs. It is a small country with a lot of challenges, a strong higher public and private education system (the largest portion of government spending are in the education sector), and there is a (slowly) growing diaspora returning home with an intent to give back to its community (#repats).
Want to read more?
If you are looking for other reports about Tunisia’s tech scene, I recommend the Ecosystem Deep Dives blog by Timothy Motte and an article written by Selma Ribica in 2021 titled “Three Reasons Why VCs Should Be Investing in Tunisian Startups”.
Ecosystem Deep Dives #1: Tunisia - Getting their start-up act together
Ecosystem Deep Dives is a weekly series in which I analyze and compare different start-up ecosystems from around the world. If you enjoy and gain value from my work, feel free to share and subscribe! Background Tunisia famously became one of the only countries to successfully carry through the popular aspirations of the Arab Spring.
Three Reasons Why VCs Should Be Investing in Tunisian Startups
In 2019, Tunisian startups raised more from investment funds than the previous three years combined. And the COVID-19 crisis of 2020 doesn't seem to have stopped this growth: agritech startup NextProtein announced the closing of their EUR10 million Series A investment, the largest VC round raised so far in the country, in May 2020.