By: Rym Baouendi, a senior advisor at the Legatum Center for Development and Entrepreneurship at MIT
Tunisia is officially making big waves in the technology industry. With a rapidly evolving entrepreneurship and innovation ecosystem, Tunisia is positioned itself to become a top destination for entrepreneurship and innovation, especially in DeepTech.
The news of BioNTech’s acquisition of Instadeep, a DeepTech startup founded in 2014 in Tunisia by two Tunisians, Karim Beguir and Zohra Slim, for £362 million upfront and an additional £200 million contingent on future performance, shook the Tunisian entrepreneurial and innovation ecosystem to its core. Such acquisitions are always seen as significant milestones in the development of ecosystems. The story of Instadeep demonstrates that Tunisian businesses are able to innovate, compete on a global scale, and attract the attention of major IT industry players.
Instadeep’s Journey
Over time, Instadeep has established a name for itself in artificial intelligence (AI), biotechnology, and other DeepTech fields. The startup began with $2000, two laptops, and a lot of enthusiasm. They focused on establishing a platform that leverages deep reinforcement learning and other advanced machine learning technologies to bring AI to enterprise applications, allowing businesses to optimize choices and increase productivity.
The pan-African private equity and venture capital firm AfricInvest led the $7 million Series A investment round in 2019. This cash was utilized carefully to create a scalable product platform for AI-based enterprise decision-making. The next year, the founders forged a multi-year strategic partnership with BioNTech to develop an AI-powered Early Warning System for detecting SARS-CoV-2 variants with a high risk of transmission. Almost 90% of World Health Organization-designated variations were identified on average two months in advance by the system.
In 2022, Alpha Intelligence Capital led a $100 million Series B funding round in which BioNTech, Chimera Abu Dhabi, Deutsche Bahn’s DB Digital Investments, Google, G42, and Synergie also participated. The financing was utilized to enhance Instadeep’s high-performance computing infrastructure, recruit elite talent, and expedite the development of breakthrough AI technologies across numerous industries, including biotechnology, logistics, transportation, and electronics manufacturing. In addition to expanding its global reach into the United States, the company established a base in Kendall Square.
Throughout its history, Instadeep’s growth strategy has centered on forming strategic alliances with market-leading businesses and organizations. The company has collaborated with Google, Deutsche Bahn, and DeepMind on AI efforts and has published joint research with Google Research and DeepMind. In addition, it has made it its aim to strengthen local AI communities by means of events, training, and open-source software. Engineers and researchers from South Africa, Nigeria, the United Arab Emirates, and France, in addition to Tunisia and London, comprise the company’s high-performing and varied talent pool.
Where it all Started: Tunisia’s Innovative Ecosystem
Tunisia is the fifth-fastest growing startup ecosystem in Africa, behind the Big Four (South Africa, Egypt, Kenya, and Nigeria). Since the revolution of 2011, Tunisia has focused its efforts on developing a thriving entrepreneurial and innovation ecosystem, which is beginning to bear fruit. Tunisia is currently recognized as a startup hub in both Africa and the Middle East
Tunisia’s well-developed ecosystem of stakeholders, including coworking spaces, incubators, accelerators, and investors, is a crucial factor in its success as a startup hub. From a regulatory standpoint, the Startup Act, a one-of-a-kind legal framework designed to encourage entrepreneurship and innovation, has fostered the growth of startups and drawn international interest and investment. This unusual program led other African nations, like Senegal, Nigeria, and most recently the Democratic Republic of the Congo, to adopt similar policy instruments.
In addition, the country has a thriving STEM sector with active R&D, which has been crucial to its success in breakthrough DeepTech domains. The 2022 Global Innovation Index ranks Tunisia 45th on “Human capital and research” and 53rd on “Knowledge and technology outputs” (GII). Tunisia is also home to numerous scientific research centres and technical institutes, where scientists, engineers, and researchers perform cutting-edge research in a number of sectors, such as artificial intelligence (AI), biotechnology, genomics, and robotics.
The Global Innovation Index (2021) puts Tunisia 71st out of 132 economies, and the nation performs “above expectations for its degree of development” in terms of innovation. It ranks third in Africa, fourth in the Arab World, and seventh among countries with a lower middle income. It ranks 18th for “Easy of beginning a business,” 2nd for science and engineering graduates, and 18th for scientific and technical papers per billion PPP$ GDP. Several of these innovators are keen to commercialize their findings at present. In response to this demand, assistance initiatives such as Connect’Innov, Open Startup, and Technoriat have developed programs and forged worldwide partnerships to give science-based companies with vital resources such as finance, mentorship, and networking opportunities.
The Future of Innovation in Tunisia
The acquisition of Instadeep by BioNTech is a huge milestone for Tunisia’s DeepTech ecosystem, and it demonstrates the country’s ability to innovate and compete globally. Yet, Tunisia is just getting started in terms of DeepTech innovation. As the startup ecosystem continues to mature, we may anticipate an increase in the number of Tunisian startups raising significant capital, forming strategic relationships with important corporations, and achieving their own exits.
To further support and promote the development of Tunisia’s DeepTech sector, a comprehensive and coordinated ecosystem is required. This ecosystem must include supportive regulations, capacity-building support, role models such as Instadeep, access to funding and resources, and opportunities for collaboration and networking. Moreover, Tunisia’s DeepTech ecosystem can benefit from the establishment of international alliances and networks, through which entrepreneurs can learn from the experiences of other nations, connect with international investors and business partners, and have access to the newest technology.
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