Morocco is working to foster the growth of start-ups with a focus on technology and innovation. The country has experienced significant growth in attracting investment into startups, with a projected increase of 93% by 2023.
The country’s startup sector highlights a growing tech scene and entrepreneurial investment interest despite obstacles. With several investment funds focused on tech companies, the country ranks fifth on the continent in deal volume and is aiming for third place.
More than 10 public and private investment funds have been established in recent years to support start-ups. Last year, Morocco signed 17 financing agreements, and this number is growing every year. StartupBlink’s Global Startup Ecosystem Report (GSER) has seen Morocco’s ranking rise to 34th place, indicating significant growth in its startup ecosystem.
Casablanca ranks third in North Africa on the Startup Ecosystem Index, but the main barrier to achieving this status is access to capital. Morocco’s largest investment fund has invested around $44 million in recent years and plans to double this figure in future, focusing on startups in the healthcare, agriculture and industrial sectors.
The Digital Morocco Fund and UM6B Venture Fund are two of the largest funds focused on backing startups in sectors such as health, agriculture and industry. These investment funds work to support startups in markets outside the country, particularly in the Middle East and North Africa (MENA) region. Access to capital is the most significant obstacle to the growth of startups in the country.
Founded in 2010, the Morocco Digital Fund became the country’s first startup funding organization, investing $25 million in 26 startups. The State Managed Deposit Fund launched the Founders 212 startup support program in 2019, with plans to invest $12 million to boost its coffers.
The UM6B Entrepreneurship Fund, established by Mohammed VI Polytechnic University, has invested $7 million since 2021 and plans to invest $50 million over the next few years. Despite its potential, startup development in Morocco faces obstacles including restrictive regulations, weak government contracts, lack of demand for government services, and the small size of the local market.
UM6B Venture Capital is focused on backing deep tech startups in sectors such as agriculture, chemicals, healthcare, green technology and digital transformation across the globe. Yassine Laczioui, CEO of UM6B Venture Capital, is committed to helping companies drive technological sovereignty in Africa. The fund plans to invest $50 million over the next few years, up from its last investment of $7 million last year. The investment fund highlights the African market as a rich investment opportunity.
The strategy is to expand its customer base by targeting emerging businesses in markets such as Africa, Europe and the Gulf. There is a tendency to focus on foreign-led projects outside Morocco, a practice that has been adopted by local organisations such as the Moroccan Digital Foundation.
Moroccan Startups 2024: Predictions and Trends
The growth of Morocco’s startup ecosystem is expected to continue in 2024, with the number of startups expected to grow by 20%, bringing the total number to over 1,500 companies. Additionally, Morocco-based companies are expected to grow by 15% by 2024, increasing their total revenue by an estimated $200 million.
Information and communications technology (ICT) will continue to be a growth area, offering opportunities in areas such as artificial intelligence, data analytics and cybersecurity.
Healthcare and biotechnology will be established as sectors with great potential, especially in research and development of vaccines and treatments.Tourism is another growth sector in Morocco, offering opportunities for start-ups focused on tourism experiences, hotel bookings and travel package management. The tourism industry received more than $8 billion in investment from the province last year.
Despite progress, a lack of infrastructure and resources can still be a barrier for startups in Morocco. However, education and training in digital skills will be crucial to prepare Morocco’s youth for the labor market and spur economic growth.
The total value of startups is expected to increase by 25% and employee count by 20% by 2024. Startup survival rates are expected to increase by 15%. The amount of funds investing in Moroccan startups is expected to increase by 20 percent, while foreign investment in Moroccan startups is expected to grow by 15 percent.
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