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The entrepreneurial spirit has been growing across Kenya’s agri-tech, e-commerce, fintech and logistics sub-sectors.
The growth has attracted large funding rounds from international venture capitalists (VCs) and institutions on solid and proven investments.
Between 2015 and 2020, for example, investments in the country increased to Sh26 billion from Sh20.8 billion ($191.4 million), representing a 27.3 percent of the continent’s total investment.
Nigeria came second with Sh16.3 billion followed by South Africa (Sh15.5 billion), Egypt (Sh15.4 billion), Ghana (Sh2.2 billion) and Morocco at Sh1.1 billion.
“This is the largest amount of funding ever achieved by a single country. The record was previously also held by Kenya, when in 2019 the country’s start-ups netted Sh16.2 billion ($149.2 million),” Disrupt Africa Tech Startups 2020 Funding report shows.
The growth was driven by an increase in the number of start-ups that raised funding, which rose to 59 from 45, representing a 31.1 percent jump.
Out of these, agri-tech company Twiga Foods and conservation venture Komaza recorded standout rounds, bagging Sh3.2 billion ($29.4 million) and Sh3.1 billion ($28 million), respectively.
Others were logistics start-up Sendy at Sh2.2 billion ($20 million), retail-tech solution Sokowatch raised Sh1.5 billion ($14 million), energy ventures SunCulture (Sh1.5 billion ($14 million), Angaza (Sh1.46 billion ($13.5 million), and Solarise Sh1.1 billion ($1 million).
“This is only the fourth highest tally in terms of number of funded companies – with Nigeria, Egypt and South Africa all boasting more funded start-ups, albeit to a (substantially) lesser cash total,” the report notes.
Since it was started in 2014, Twiga Foods has grown into one of Kenya’s successful start-ups.
The company was founded by former Coca-Cola employee Peter Njonjo and Grant Brooke.
The duo stewardship has seen the company secure funding from international organisations, among other investors.
For instance, last year, it secured a Sh3.2 billion ($30 million) from the International Finance Corporation (IFC) to support small and medium enterprises as well as expand to East and West Africa.
It runs a mobile phone-based platform that sells bananas and other fresh produce from small-scale farmers to local vendors and markets.
Similarly, in 2020, Logistics firm Sendy, which operates an app linking delivery drivers with customers, raised Sh2 billion in funding from a group of institutional investors including Japanese conglomerate Toyota Tsusho Corporation (TTC) for expansion.
Whereas only six funded ventures bagged over Sh1.1 billion ($1 million) dollar-plus rounds in 2015, this increased to 22 last year in the country.
“The number of start-ups raising over a million dollars has been on the rise for years in Kenya; and the size of these rounds is also fanning out – whereas in the early years even the highest rounds were in the Sh1.1-2.2 billion ($1-2 million) range, today large tickets span from Sh1.1 billion ($1 million) to Sh3.3 billion ($30 million), evidencing the increasing availability of growth funding.”
Top investors in Africa include Future Africa, Orange Ventures, Musha Ventures, among others.
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