n an era defined by rapid globalization and technological advancement, Ethiopia is witnessing the rise of a vibrant startup culture poised to empower the nation’s burgeoning younger generation. In today’s fast-paced digital era, these fledgling ventures are nurturing a spirit of innovation and creativity by providing aspiring entrepreneurs with the necessary skills, connections, and resources to tackle societal challenges and fuel economic growth.
Through mentorship, access to capital, and networking events, platforms that incubate and provide funding, and the necessary tools for startups are transforming the ideas of Ethiopia’s youth into viable businesses, generating jobs and contributing to national development.
By unleashing untapped talent and entrepreneurial drive, the growth of startups represents a promising path forward for Ethiopia.
Several financial institutions support this promising trend.
Dashen Bank and Awash Bank have launched initiatives like “Kefitta” and “Tatariwotchu” to empower the country’s youth through entrepreneurship. Their goal – to reduce unemployment by providing training, seed funding, and guidance to budding entrepreneurs nationwide.
Dashen Bank kicked off its “Ethiopian Talent Power Series” (“Kefitta”) in 2020. Touring cities across Ethiopia, the program offers business skills workshops. Backed by a 100 million birr fund, it targets talented individuals, awarding seed funding from 100,000 to 500,000 birr.
Similarly, Awash Bank’s program “Empowering the Visionaries” (“Tatariwotchu”) aligns with their corporate social responsibility initiatives. It focuses on developing skills, cultivating scalable solutions, and promoting social impact among Micro, Small and Medium-sized Enterprises (MSMEs).
Both Dashen’s “Kefitta” and Awash’s “Tatariwotchu” have entered their second phases, further committed to fostering the aspirations of Ethiopia’s next generation of entrepreneurs.
Beyond financial institutions, the private sector is also lending support by helping startups navigate Ethiopia’s business landscape, paving the way towards progress.
Ethiopia introduced the Startup Act in 2020, creating a National Startup Council led by the Minister of Innovation and Technology. The Council oversees and strengthens the nation’s burgeoning ecosystem.
Early progress is evident. The 2023 Global Startup Ecosystem Index ranked Addis Ababa 692 among 1,000 cities worldwide – underscoring Ethiopia’s efforts in cultivating an emerging startup culture.
Of course, challenges remain in building a robust, interconnected ecosystem. But the capital city is evolving as a hub facilitating smaller ecosystems across the region through interconnected relationships. According to the report, Ethiopian founders predominantly focus on solving local challenges – an effective strategy.
Globally, countries like India, Switzerland, the UK, Denmark, Vietnam and Singapore have successfully implemented initiatives to back their startups. In Africa, Nigeria, Egypt and South Africa are attracting investors and creating jobs through their growing startup landscapes.
Ethiopia’s vibrant youth movement shows promising signs of replicating this innovation-driven economic model with continued high-level guidance and support.
The country’s startup scene is also gaining international attention.
As the effects of climate change intensify, the search is on for scalable solutions that can drive meaningful impact. One entrepreneur gaining acclaim is Kidus Asfaw of Kubik Ethiopian Plastic Manufacturing PLC.
Kidus, co-founder and CEO of Kubik, was recognized on Time Magazine’s prestigious 2023 TIME100 list for his innovation (climate leadership).
Kubik transforms ubiquitous plastic waste into low-carbon, durable and affordable building materials to combat housing shortages across Africa as the population expands across the continent.
“At Kubik, we have a technology that can help countries reduce their carbon and plastic footprint – all while making safe, durable, and affordable housing,” Kidus said during his TIME feature.
The startup envisions sustainable growth where dignity in housing extends to 300 million families by 2030.
It’s an innovation inspired by Kidus’ childhood. Kubik manufactures, everything from classrooms to commercial spaces, reimagining construction’s environmental toll.
As Africa urbanizes at a breakneck pace, an estimated USD 170 billion worth in annual building materials are needed to keep up. The companysays this presents a significant opportunity for innovative clean technologies on the continent.
As a COP28 Climate Actionist, Kidus spotlights cities’ potential for climate action with 70 percent of the global population inhabiting them by 2050. He urges for cities to drive supportive policies and innovation for a cleanlier and economical living.
“Africa’s rapid urbanization presents an opportunity for innovation in clean technology,” he said.
Kidus’s recognition highlights innovative startups’ potential to tackle pressing issues like climate change, waste, and affordable housing. As COP28 comes and goes with numerous pledges made by countries to reduce their carbon footprint, and limit the rise of global temperature, sustainable solutions exemplified by Kubik will be crucial in curbing global warming.