A recent study by TLP Advisory has revealed that many African technology firms have strong ties to the United Kingdom. The report, titled "Home and Away" ecosystem report, examined 100 technology companies from six African countries, including Kenya, Nigeria, South Africa, Egypt, Ghana, and Morocco. The study found that among African tech firms with UK affiliations, a significant proportion are incorporated in the UK. This trend suggests that the UK is a popular destination for African tech firms looking to establish a presence abroad.
According to the TLP Advisory report, 84% of African tech firms with UK ties are incorporated in the UK, while 47% maintain an operational presence in the country. Additionally, 19% of these firms hold regulatory licences in the UK. The report highlights that incorporation is distinct from operating a business or securing permission to provide regulated services. The study's findings provide valuable insights into the global footprint of African tech firms and their connections to major economies.
The TLP Advisory report also compares the UK's role to that of the US and UAE in the African tech ecosystem. The study notes that US-affiliated firms are primarily incorporated for financing purposes, with only 3% holding licences. In contrast, UAE-linked firms show a stronger operational role, with 87% operating in the UAE and 4% holding licences. These findings suggest that different countries have distinct roles in the global tech landscape, and African firms are taking advantage of these opportunities.
The UK's appeal to African fintechs is highlighted in the report, citing the Financial Conduct Authority's authorisation framework and the presence of UK-based customers who remit money to Africa. For example, LemFi's UK-registered entity serves Kenyan transfers, demonstrating the UK's importance in facilitating cross-border transactions. The report suggests that the UK's regulatory environment and customer base make it an attractive destination for African fintech firms.
TLP Advisory points to UK investment incentives, such as the Seed Enterprise Investment Scheme and the Global Entrepreneur Programme, which can provide tax relief and visa support for founders establishing a UK headquarters. These incentives may contribute to the UK's popularity among African tech firms. However, eligibility requirements still apply, and firms must carefully consider the benefits and drawbacks of establishing a UK presence.
The TLP Advisory report cautions that its findings apply only to the selected companies with documented overseas affiliations and cannot be extrapolated to all African technology firms. The report's sample consists of 100 technology companies from six African countries, but it does not break down the number of Kenyan firms in the sample. Further research would be needed to understand the full implications of the study's findings for the African tech ecosystem.
The full report is accessible via a registration form on TLP's website, offering more detailed information on the study's methodology and findings. While the report does not provide detailed definitions of the operational and licensing metrics, it offers valuable insights into the global connections of African tech firms. As the African tech ecosystem continues to evolve, studies like this one will help shed light on the trends and patterns shaping the industry.
Key points
- 84% of African tech firms with UK ties are incorporated in the UK.
- The UK's appeal to African fintechs is driven by its regulatory environment and customer base.
- TLP Advisory's findings apply only to the selected companies with documented overseas affiliations.
