Digest Africa Country Brief: Kenya Startup Funding

A country overview on Kenya can be found here. Kenya can arguably be termed as the epicenter of East Africa’s tech startup scene. Per Statista data,  Kenya is the 4th largest country by GDP in Africa and also ranked as the 8th among countries with the highest GDP in 2019. The country’s ICT sector is set to contribute up to 8% to this figure this year through IT-enabled services (ITES)  with a higher growth rate compared to other sectors. Enpact Lab’s Startup Ecosystem Report: Nairobi using the ‘Startup Friendliness Index’ that examines 80 indicators in 6 domains including human capital, access to finance, infrastructure quality, startup scene liveliness among others, ranks the city number 7 out of 16 cities in Africa and the Middle East. Kenya has also been ranked the second leading innovation hub in sub-Saharan Africa in the Global Innovation Index (GII) 2019 report. This startup landscape makes up part of the innovation quadrangle of the continent and is home to over 40 hubs.

Although the economy is relatively mixed, capitalism is advancing. The Kenyan government has played a major role in supporting the development of entrepreneurship within the country, seen through the approval of Kenya’s Vision 2030 Flagship Project Konza Technology City. The construction of this ‘Silicon Savannah’ is already underway with the first complex complete and is said to be the largest proposed tech hub for the continent. While there is no specific startup law in Kenya similar to Tunisia and Senegal, the Kenyan government has displayed commitment to startups through initiatives such as the presidential directive directing that 30% of public tenders be reserved for companies started by youth (below 25), women entrepreneurs or people with disabilities

The government also signed a memorandum of understanding (MOU) with the Next Einstein Forum (NEF) to host the 2020 edition of the NEF Global Gathering, a biennial global event that combines science and technology to unveil breakthroughs in these fields, respond to existing challenges and look to the future. The event is set to be hosted at the Kenya International Convention Center (KICC) in Nairobi. 

When comparing levels of innovation to the level of economic development, the Global Innovation Index (GII) 2019 report identifies Kenya among other countries, as outstanding for outperforming on innovation relative to GDP for the ninth consecutive year, which is a new record. Per Digest Africa Index, Kenya has also maintained top 4 positions when it comes to attracting venture funding over the past 4 years together with Nigeria, South Africa and Egypt. 

Also read: These Are The 12 Most Funded Startups in Kenya

Digest Africa data shows over 500 startups based in Kenya. Out of these, 185 have raised over the past 12 years in a total of over 374 rounds that makeup a value of $1.32 billion in disclosed funding. We note the following about early stage funding in Kenya:

  • Most funding based on number of deals by stage: Grants (92 deals), Seed (84 deals), Series A (34 deals) and Debt Finance (34 deals).
  • Most funding based on amount by stage: Debt Finance ( $378.42M), Series C+ ($295.7M), Series A ($246.4M), Private Equity (119M) and Series B ($116.4M). 
  • Top 20 venture deals total a value of $489.4M and therefore 37% of all funding to date.
  • Gender split by number of deals: 27% (50) of companies that raised funding are women led or co-founded while 73% (135) are co-founded or led by men. 
  • Gender split by amount of funding: 12% of the total funding raised so far ($159.5M) was raised by women-led or co-founded companies and 88% ($1.158 billion) by men-led or co-founded startups. 
  • Largest deal is Debt Financing $80M to M-Kopa with Debt Financing representing  $377M  in disclosed financing.
  • Most funding by amount, Top 3 Sectors: Energy & Environment (70 deals, $600M) Financial Services (49 deals, $201.3M) and E-Commerce (30 deals, $127.8M).
  • Most active investors, by number of deals: Mastercard Foundation (6, $2.4M); ShelterTech Kenya Accelerator Program (6, $260K); Total Startupper Challenge (6, $97K); True Ventures (4, $36M) and DOB Equity (4, $17M).
  • Highest venture capital raise: Series D (Bboxx, $50M, Investors: Mitsubishi Corporation, Bamboo Capital Partners, Doen Participaties, MacKinnon-Bennett & Company and ENGIE); Series C (Cellulant, $47.5M, Investors: The Rise fund, Satya Capital, Endeavor Catalyst, Velocity Capital and Progression Capital Africa)
  • Year on year growth: 2016 ($113.7M), 2017 ($199M), 2018 ($350M), 2019 ($373M), 2020 ($80.6M); 49% YoY growth in amount of funding between 2016 - 2019.

COVID19 Impacts: In 2020, so far there has been $80.6M raised by early stage companies versus $373M for the whole of 2019. This represents a 78% drop in funding so far, Digest Africa estimates that overall there will be a 60% - 70% drop in funding for the Kenyan startup ecosystem in 2020 compared to 2019. To combat some of the effects Covid19 is having on the ecosystem, The Association of Startup and Small and Medium Enterprise Enablers of Kenya (ASSEK) and UK Kenya Tech Hub have curated a live sheet documenting resources available for businesses including financial and grant support, virtual support, business tools and volunteer expertise during the COVID-19 period. Nairobi-based venture debt investor Equalife Capital launched its $20M Africa Venture Debt COVID-19 Relief Fund to extend financing to East African companies seeking capital during this crisis. Other relief funds include the REACT Kenya Relief Fund with a $2M initiative awarding emergency grant to Kenyan startups and Vital Impact COVID-19 Debt Fund ($1M). 

For a more detailed analysis and to access the Kenya Startup Ecosystem Country Report or custom insights and due diligence, please subscribe to Digest Africa.

If you are a startup seeking funding, complete and or claim your profile at Digest Africa and complete our survey here so that we can provide you free a list of 3-5 investors that may be a match.

Digest Africa



Digest Africa Technologies Ltd
Ntinda Complex,
Block B, Level 3 Ntinda,
Kampala, Uganda

© Digest Africa Technologies Ltd 2023.
All Rights Reserved.