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Startups in Morocco: unlocking economic potential and closing the gap with Africa’s leaders

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In 2024, Moroccan startups raised $70 million, marking a spectacular rise from $17 million in 2023, according to the Africa: The Big Deal report relayed by Finances News Hebdo. This fourfold increase places Morocco fifth in Africa. However, the country remains far behind the continent’s “Big Four” — South Africa, Nigeria, Egypt, and Kenya — which continue to dominate Africa’s entrepreneurial landscape.

Morocco also faces competition from emerging players such as Ghana and Tanzania, whose startup ecosystems are gaining momentum. This Moroccan performance is particularly noteworthy in a year when overall investments across Africa dropped by 25%.

Promising Local Initiatives

The progress of Moroccan startups is partly attributed to initiatives like the Innov Invest program, led by Tamwilcom. This program has structured a local investor network, growing from a handful of actors a decade ago to around ten active funds today. However, these advances are modest compared to the massive investments attracted by the “Big Four.” According to Finances News Hebdo, the limited size of Morocco’s market and its low level of regional integration reduce its appeal to international investors.

Strategic Sectors Lagging Behind

In Morocco, funding primarily focuses on agriculture, education, and logistics, which dominated investments in 2023. Conversely, strategic sectors such as fintech and climate tech, accounting for 70% of funding continent-wide, are still underdeveloped. In 2022, retail absorbed nearly 50% of capital, driven by players like Chari.

With a banking penetration rate of approximately 60%, Morocco finds itself in an intermediate fintech position: too advanced for explosive growth but not mature enough to fully meet international investors’ expectations. This challenge also affects other sectors, such as digital health, urban mobility, and drones, which face restrictive regulations.

The Challenge of Mid-Level Financing

Despite notable progress, Morocco struggles to attract large-scale investments. Mid-level funding, ranging between 15 and 50 million dirhams, remains hard to secure. These amounts are too large for local venture capital funds but too small for private equity investors. This gap limits Moroccan startups’ ability to achieve critical growth milestones and expand internationally.

Steps to Accelerate Economic Growth

To bridge the gap with Africa’s leading ecosystems, Finances News Hebdo suggests several measures:

  • Strengthen regional integration and position Morocco as a hub for West Africa.
  • Expand the internationalization of fundraising efforts to attract more foreign investment.
  • Establish new public and private funds with higher investment capacities.
  • Implement ambitious structural reforms to stimulate the entrepreneurial ecosystem.

The Key Role of Public Procurement

Proactive public procurement could transform Morocco’s entrepreneurial ecosystem. By integrating local startups into public projects, the state could boost innovation and enhance competitiveness. However, this transformation requires strong political will and an overhaul of existing mechanisms.

Despite promising progress, Morocco must overcome significant challenges to position itself as a major player in Africa’s startup economy. By adopting bold strategies and focusing on better regional integration, the country can unlock its economic potential and close the gap with the continent’s leaders. 

The Editor