Morocco is working hard to encourage the growth of startups with a particular focus on technology and innovative ideas. The country has seen a significant increase in the amount of investment in startups. By 2023, this figure is expected to be 93% higher.
The startup sector in the country highlights the growing tech industry and the interest of entrepreneurs to invest despite obstacles. Several funds invest in tech companies and are ranked fifth on the continent for deals. They aim to reach third place.
In recent years, more than 10 public and privately-funded investment funds have been established to support startups. Morocco signed 17 financial agreements last year and this number continues to increase.
Casablanca is ranked third in North Africa on the Startup Ecosystem Index. The main obstacle to achieving this ranking is access to financing. Morocco’s biggest investment funds have invested 44 million dollars over the past few years and plan on doubling this figure in future. They are focusing their efforts on startups in the sectors of health, agriculture, and industry.
Digital Morocco Fund and UM6B Venture Fund, two of the largest funds, support start-ups from sectors like health care, agriculture and industry. The investment funds support start-ups on markets outside of the country, particularly in the Middle East and North Africa region (MENA). Access to finance is a major obstacle to the growth and development of start-ups.
The Moroccan Digital Fund was founded in 2010 and became the first startup financing organisation in the country. It invested 25 million dollars into 26 startups. The State Fund for Management and Deposits (SFM) launched the Founders 212 programme to support startups in 2019. It invested 12 million dollars and plans to increase financial resources.
The Mohammed VI University of Technology’s UM6B Entrepreneurship Fund has invested 7 millions dollars since 2021, and plans to invest another 50 million dollars over the next few years. Morocco’s startup development is not without obstacles, including restrictive regulations, weak contracts with the government, a lack of demand for services from the government, and the small size of its local market.
UM6B Venture Capital focuses its efforts on supporting deep-tech startups in areas such as agriculture, chemicals and healthcare, green technologies, digital transformation, and other sectors around the globe. Yassine Lagzioui, CEO of UM6B Venture Capital, is committed to helping African companies promote technology sovereignty. The fund will invest 50 million dollars in the next few years. This is an increase from the 7 million dollars that it invested last year. The investment funds promote the African market as an attractive investment opportunity.
To expand their clientele, the strategy is to target emerging businesses in markets like Africa, Europe and Gulf. Local organisations, such as the Moroccan Digital Foundation, tend to focus on projects led by foreigners outside of Morocco.
Startups in Morocco by 2024: trends and projections
Morocco’s startup eco-system is expected to grow in 2024 with a 20% rise in the number of companies, bringing their total to more than 1,500. Companies based in Morocco will also grow by 15%, bringing their total revenue up by 200 million dollars by 2024.
Information and communication technology (ICT), which includes areas like artificial intelligence, data analysis, and cybersecurity, will continue to grow.
Healthcare and biotechnology are areas that will consolidate their potential, particularly in the research and development vaccines and treatments. Morocco’s tourism sector is also a growing industry, with start-ups focusing on hotel bookings, travel packages, and tourism experiences. Last year, the Ministry of Tourism invested more than $8 billion dollars.
In spite of progress, lacks in infrastructure and resources may still pose a barrier to new business start-ups. Education and training in digital skill will be vital to prepare young Moroccans and promote economic growth.
By 2024, it is expected that the total value of startups will increase by 25%, and the number of employees will increase by 20%. The survival rate of startup companies is expected to increase 15%. The volume of funds invested in Moroccan startups will increase by 20%, and foreign investments into Moroccan startups will increase by 15%.