Infrastructure-as-a-service becomes the real African SaaS story
Melvyn Lubega, Partner South Africa
The early SaaS narrative in Africa focused on building lighter versions of Western CRM, HR or accounting tools with local pricing and mobile interfaces. Useful, but they do not shift the structural constraints that make operating a business in Africa expensive and unreliable.
The fundamentals show a different direction. Africa’s SaaS market is estimated at about 3.5 billion dollars in 2023 and projected to reach about 10 billion dollars by 2030 at roughly 25 percent annual growth. Yet upstream infrastructure remains thin. Between 30 and 50 percent of harvested grains and 40 to 50 percent of perishable produce are lost before reaching consumers because cold-chain systems are weak. Data centre demand across Africa is expected to multiply as AI adoption grows, with 10 to 20 billion dollars of new investment needed by 2030. Many of the models that scale are not pure software. They convert physical infrastructure and regulated processes into predictable, subscription-like services.
That is why the most valuable SaaS in Africa will increasingly be infrastructure-as-a-service:
- Cold chain and logistics infra sold as a service with solar-powered cold rooms, temperature-controlled routes and inventory tools exposed via simple contracts and APIs.
- Regulated as-a-service layers in banking, utilities and mobility that abstract licences, risk controls and compliance so new entrants can launch in weeks rather than years.
- Vertical operating systems for agriculture, mining or energy that package hardware, telemetry, connectivity and billing into a single recurring revenue model.
The defensibility here is stronger than in workflow SaaS. Physical networks, regulatory licences, local partnerships and embedded hardware create real moats. The multiples will follow the businesses that turn hard infrastructure into scalable services and become the leverage behind hundreds of other companies, not the ones that offer yet another thin workflow tool.
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