Morocco: Africa's new startup paradise

The investment director of the Digital Morocco fund hopes that within five years the country could become the third largest investor in African startups
Casablanca Finance City - PHOTO/AYOUR ACHTOUK
Casablanca Finance City - PHOTO/AYOUR ACHTOUK

Morocco is working to stimulate the growth of startups, with a focus on technology and innovation. The country has achieved significant growth in attracting investment in startups, with a 93% increase by 2023.

The country's startup sector highlights the growing tech scene and the investment interest of entrepreneurs despite the obstacles. Several investment funds focus on tech companies, ranking fifth on the continent in terms of deals and aiming for third place.

Casablanca Finance City (CFC)
Casablanca Finance City (CFC)

More than 10 public and private investment funds have been created in recent years to support startups. Last year, Morocco signed 17 financial agreements and this number is increasing every year. In StartupBlink's Global Startup Ecosystem Report (GSER), Morocco has improved its ranking to 34th, indicating significant growth in its startup ecosystem. 

Casablanca ranks third in North Africa in the Startup Ecosystem Index and the main barrier to achieving this position is access to funding. Morocco's largest investment funds have invested around 44 million dollars in recent years and plan to double this figure in the future, focusing on startups in the health, agriculture and industry sectors. 

The Digital Morocco Fund and the UM6B Venture Fund are two of the largest funds focusing on supporting start-ups in sectors such as health, agriculture and industry. The investment funds are working to support start-ups in markets outside the country, especially in the Middle East and North Africa (MENA) region. Access to finance is the most important obstacle to the growth of start-ups in the country. 

Founded in 2010, the Moroccan Digital Fund became the first startup funding organisation in the country, investing 25 million dollars in 26 startups. The State Fund for Management and Deposits launched the Founders 212 startup support programme in 2019, investing 12 million dollars and planning to increase financial resources. 

Edificios del área financiera de Casablanca - PHOTO/ATALAYAR
Edificios del área financiera de Casablanca - PHOTO/ATALAYAR

The UM6B Entrepreneurship Fund, set up by the Mohammed VI University of Technology, has invested 7 million dollars since 2021 and plans to invest 50 million dollars in the coming years. Despite its potential, startup development in Morocco faces obstacles such as restrictive regulations, weak government contracts and lack of demand for government services, as well as the small size of the local market. 

UM6B Venture Capital focuses on supporting deep tech startups in sectors such as agriculture, chemicals, healthcare, green technology and digital transformation around the world. UM6B Venture Capital CEO Yassine Laghzioui is committed to helping companies promote technology sovereignty in Africa. The fund plans to invest 50 million dollars over the next few years, up from the current 7 million dollars it closed with last year. The investment funds highlight the African market as a fertile investment opportunity. 

Yassine Laghzioui director ejecutivo de UM6P Ventures y el director de emprendimiento y aventura en la Universidad Politécnica Mohammed VI<strong> - PHOTO/ARCHIVO</strong>
Yassine Laghzioui director ejecutivo de UM6P Ventures y el director de emprendimiento y aventura en la Universidad Politécnica Mohammed VI - PHOTO/ARCHIVO

The strategy is to target emerging companies in markets such as Africa, Europe and the Gulf to expand their client base. There is a tendency to focus on foreign-led projects outside Morocco, a practice adopted by local organisations such as the Moroccan Digital Foundation. 

Startups in Morocco 2024: projections and trends 

The growth of Morocco's startup ecosystem is expected to continue in 2024, with a 20% increase in the number of startups, bringing the total number to more than 1,500. In addition, companies based in Morocco are expected to grow by 15% by 2024, increasing their total revenues by an estimated 200 million dollars.

Information and communications technology (ICT) will continue to be a growth sector, offering opportunities in areas such as artificial intelligence, data analytics and cybersecurity. 

Healthcare and biotechnology will consolidate as areas with great potential, especially in the 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. Tourism received more than 8 billion dollars in investment from the Ministry last year. 

Despite progress, lack of infrastructure and resources can still be barriers to start-ups in Morocco. However, education and training in digital skills will be crucial to prepare young Moroccans for the labour market and promote economic growth. 

By 2024, the total value of startups is expected to increase by 25% and the number of employees by 20%. The survival rate of startups is expected to increase by 15%. The volume of funds investing in Moroccan startups is expected to increase by 20% and foreign investments in Moroccan startups are expected to increase by 15%.