- Data from the American online platform Substack shows that financing for young local companies increased by USD 549 million (62.2 billion) in the past year.
- The poor performance of the Kenyan startup ecosystem came after the country ranked fourth in 2020 on deals of over $ 1 million ($ 113 million) raised in Africa had fallen in the last year.
The financing of Kenyan start-ups by international investors went down by Sh 15 billion last year. back, while the number of deals worth more than Sh 1 million. (113 million Sh.) Decreased.
Data from the American online platform Substack shows that the financing of young local companies increased last year from 549 million US dollars (62.2 billion US dollars) in 2020 to 411 million US dollars (46.5 billion US dollars ) has decreased, which corresponds to a decrease of 25.1 percent.
The poor performance of the Kenyan startup ecosystem came after the country ranked fourth in 2020 on deals of over $ 1 million ($ 113 million) raised in Africa had fallen in the last year.
“Kenya had a particularly strong 2020 and led the table, but could not stay at the same level in 2021,” says the Substack report.
“2021 tells a more contrasting story as the country has dropped to fourth and fifth totals in terms of the number of $ 1 million deals.”
The slump last year came after Kenyan startups set a record for funding growth of Sh62.2 billion. in 2020, compared to Sh 20.85 billion. in 2019.
Nigeria led the way in venture capital (VC) investments in Africa last year with $ 1.5 billion ($ 170 billion). It was followed by South Africa with $ 945 million ($ 107.1 billion) and Egypt with $ 599 million ($ 67.8 billion).
“Nigeria slumped in 2020 but recovered massively in 2021, fueled by some strong mega-deals,” the report said.
Kenya is home to several start-ups such as Twiga Foods and Komaza, which annually attract billions of shillings from international investors.
The most active investors on the continent are Launch Africa with more than 44 deals, Kepple Africa (32), Y Combinator (27), LoftyInc Capital (23) and Flat6Labs (19).
Last November, for example, Twiga Foods, which supplies fruit, edible oil and snacks via a mobile-based platform, raised $ 5.56 billion for East and West African expansion from international investors such as Creadev, OP Finnfund Global and Endeavor Catalyst Fund.
As in the developed world, most of the startups funded in Kenya and other African markets are in the tech field.
The growth of Internet connectivity has enabled innovators to find new solutions to problems in various fields such as payments, marketing, entertainment and transportation.
Investors are drawn to the potential of the solutions that can be developed on a large scale and with minimal additional cost through mobile apps or computer software.