Disruptive Technologies and Finance
This paper investigates the relationship between disruptive technologies and access to finance for digital tech firms in Africa. Through textual analysis of data from Crunchbase and Pitchbook, the study explores how firms across different age cohorts incorporate disruptive technologies into their offerings in e-commerce, fintech, and information technology services. The findings reveal three key insights for African digital tech startups. First, African startups are less likely to incorporate disruptive technologies into their offerings compared to other regions, except for mobile payments. Second, incorporating these technologies is associated with more funding, but this link is weaker in Africa than in other regions. These results hold when excluding mobile payments and addressing potential endogeneity using instrumental variables. Third, firms that do incorporate disruptive technologies tend to secure funding earlier, with lower initial amounts, but are more likely to succeed in terms of exit or valuation growth than their peers.
Main Authors: | , , |
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Format: | Working Paper biblioteca |
Language: | English en_US |
Published: |
Washington, DC: World Bank
2024-04-18
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Subjects: | DIGITAL TECHNOLOGIES, DISRUPTION, FINANCING, STARTUPS, ENTREPRENEURSHIP, |
Online Access: | http://documents.worldbank.org/curated/en/099045212072337941/IDU06a36e64303a2a04fea08e4e0a6b8ac38a381 https://hdl.handle.net/10986/41441 |
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Summary: | This paper investigates the
relationship between disruptive technologies and access to
finance for digital tech firms in Africa. Through textual
analysis of data from Crunchbase and Pitchbook, the study
explores how firms across different age cohorts incorporate
disruptive technologies into their offerings in e-commerce,
fintech, and information technology services. The findings
reveal three key insights for African digital tech startups.
First, African startups are less likely to incorporate
disruptive technologies into their offerings compared to
other regions, except for mobile payments. Second,
incorporating these technologies is associated with more
funding, but this link is weaker in Africa than in other
regions. These results hold when excluding mobile payments
and addressing potential endogeneity using instrumental
variables. Third, firms that do incorporate disruptive
technologies tend to secure funding earlier, with lower
initial amounts, but are more likely to succeed in terms of
exit or valuation growth than their peers. |
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