Latest Kenya Startup News, Funding Updates and More

Latest Kenya startup news reports indicate that Kenya hosts around 1,000 startups. The capital city of Nairobi houses around 97% of these startups.

Kenya and Egypt accounted for 58% of all startup funding in Africa for 2024. In the same regard, Kenya represented about 31% of total funds raised across the continent.

On November 21, 2024, President Ruto canceled two projects involving the Adani Group. These include the process to expand Kenya’s main airport and a $700 million deal for constructing power transmission lines.

The cancellations come in light of a US court indictment against Adani Group chairman Gautam Adani and others for alleged bribery related to solar energy contracts in India. The Kenyan energy minister stated that there was no corruption involved in the contracts with Adani.

Following the project cancellations, shares of various Adani Group companies experienced losses from 10% to 20%. The allegations involve claims that senior executives participated in a scheme to bribe Indian officials to secure contracts.

According to latest Kenya Startup News Reports, BuuPass has partnered with fintech company GiftPesa to introduce digital travel vouchers. These vouchers allow users to manage and gift travel arrangements more flexibly.

BuuPass has sold over 16 million travel tickets to improve customer experience by offering vouchers that are valid for 12 months and can be redeemed at over 3,000 outlets across the country.

DEG Impulse gGmbH has opened the application process for its develoPPP Ventures programme in Kenya, offering up to EUR 100,000 non-dilutive funding together with technical assistance for start-ups. The scheme supports business ventures that demonstrate a positive social or environmental impact. Interested start-ups should apply by December 31, 2024.

In October 2024, Kenya was the top African country by startup funding, raising $437 million, which equates to 31% of the total funds raised on the continent.

According to latest Kenya Startup News Reports, Nairobi is an Africa’s major tech hub that hosts 97% of Kenya’s startups and regional offices for multinational companies like Google and Microsoft.

Nairobi hosted the Kenya Innovation Week in December 2023 that attracted thousands of stakeholders from the startup ecosystem.

Kenya is also leading in agri-tech funding within Africa. The country has seen investments in agricultural technology and food startups driven by its established startup ecosystem.

Funding initiatives include large-scale investments in solar energy and precision agriculture with venture capital being a primary source of financing.

In November 2023, Nairobi hosted the launch of a new Coalition for Climate Entrepreneurship Hub in support of local entrepreneurs that focus on climate solutions.

African startups raised more than $1.1 billion in venture debt alone in 2023.

The fintech sector continues to be strong, where mobile banking and digital lending and payment solutions continue to drive the investment.

Fintech firms in Kenya received $158 million in 2022 through 48 deals.

There is increasing growth of incubators and accelerators which support early funding rounds in the Kenyan startup ecosystem.

The Safaricom Spark Venture Fund, for example, provides a way of access to funding along with mentorship. It is vital for startups for financial investment and mentorship.

Similarly, the newly founded Association of Startup and SME Enablers of Kenya plans to merge efforts in a better approach towards collaboration and sharing of resources.

Tax Regulation (November 2024)

Turnover tax rate is increased from 1% to 3% for MSMEs with turnover between 1 million and 25 million KES. This will simplify tax compliance for smaller businesses but will increase the tax burden on those in this range.

The VAT rate on fuel has been standardized at 16%. In addition, the threshold for mandatory VAT registration has increased from 5 million KES to 8 million KES.

A new Economic Presence Tax has been introduced in lieu of the Digital Service Tax. This will be a tax levied at a rate of 3% on deemed taxable profits by non-residents operating through digital platforms in Kenya.

A minimum top-up tax will be applied to those with an aggregate effective tax rate of below 15%, targeting the multinational groups with significant turnovers.

The CGT rate has been increased to 15% and this is bound to affect investments as well as discourage capital inflows in some sectors.

Kenya Startup Funding and Investment (November 2024)

Kenyan startups raised approximately $244 million in the first half of 2024. This is a share of the total $780 million raised across the continent, which declined by 57% from $1.8 billion in H1 2023. Kenyan startups securing about 67% of their funding through debt, amounting to $287 million.

Major Funding Rounds

d.light: The biggest funding round came through with a $176 million debt round raised by d.light, which focuses on affordable solar energy solutions for off-grid households.

M-KOPA: Fintech company M-KOPA raised $51 million in a debt round providing pay-as-you-go financing for solar systems and smartphones.

Moove: This mobility startup raked in $100 million for the financial services sector to stand at $146.5 million raised in Kenya.

SunCulture: The agricultural technology company has raised $27.5 million in Series B funding.

African Business Angel Network (ABAN): It was established in 2015, ABAN is a pan-African organization connecting angel investors across the continent. It has grown to include 72 member networks with over 5,000 early-stage investors across more than 40 countries.

ABAN plays a vital role in providing financial and human capital to startups to invest over $100 million annually in African startups.

Kenya Startup Technology and Innovation (November 2024)

The latest Kenya Startup News Reports estimated that AI in Kenya would grow up to 28.22% from 2024 to 2030. The market volume was about $1.07 billion by 2030.

Blockchain is improving transaction security and reducing fraud in banking and financial services. It also allows for quicker cross-border payments and more traceable supply chains.

Projects by the government include blockchain use in land registration to reduce corruption and enhance the accuracy of land records.

IoT devices are used for monitoring soil moisture, crop health, and weather conditions, enabling farmers to take data-driven decisions that boost productivity.

IoT solutions are being researched for smart city initiatives, including traffic management systems that optimize flow and reduce congestion.

Major Tech Hubs

iHub: This is one of the innovation hubs in Nairobi, providing co-working space and incubation to tech startups, providing mentorship, networking opportunities and access to funding.

Nailab: It has structured programs that include mentorship and business development support in accelerating startups, through training, networking events and access to investors.

Hub East Africa: A collaborative space with innovation hubs for startups across the East African region, with incubation programs, access to workshops, and connecting them to a network of investors.

LakeHub: It is located in Kisumu; LakeHub builds a community of entrepreneurs by providing them with co-working spaces and training programs and networking events.

Accelerators Programs

PPP Ventures: It offers a start-up programme offering up to €100,000 in grants to entrepreneurs in Kenya with innovative business ideas while strengthening local entrepreneurs with financial backing and mentorship.

Climate Entrepreneurship Hub: It is launched by the US Special Representative for Global Partnerships in collaboration with local partners.

Government Initiatives

The Kenyan government has introduced initiatives such as the Digital Kenya 2030 Initiative at transforming Kenya into a knowledge-based economy through ICT and the Startup Bill 2021, which creates a conducive environment for startups by providing tax incentives and reducing regulatory hurdles.

Startup Events, Hackathons and Expos in Kenya 2024

Top Startups in Kenya (November 2024)

Top Tech Startups in Kenya

Fintech Startups in Kenya

In 2023, Kenya’s economy added approximately 848,100 new jobs. Total employment rose to approximately 20 million. The main driver of this growth has been the informal sector; it accounted for more than 83% of jobs created.

The Kenyan government hopes to create 3.5 million jobs for youths in e-commerce and startups by 2027. In the first half of 2024, Kenyan startups raised about $200 million.

Estimates indicate that around 70-80% of African startups fail within the first five years.

A report responds to the fact that between 2023 and mid-2024, some of the Kenyan startups which include Kune Foods and MarketForce went down the drain due to funding issues and a mismatch in the market.

The overall M&A activity has had a mixed performance with a 45% decline in deal value within the first nine months of the year compared to 2023.

One of the significant deals in 2024 was the acquisition of National Bank of Kenya Limited by Access Bank Plc. This deal, approved on August 22, 2024, saw Access Bank acquire all issued shares of National Bank.

The latest Kenya Startup News Reports show that Kenya ranks 63rd globally in the 2024 Global Startup Ecosystem Index, a drop of one spot from the previous year.

Kenya retains its third place in Africa for startup ecosystems following Nigeria and South Africa.

Nairobi has shown improvement climbing 24 places to rank 113th globally, up from 137th last year. This makes Nairobi the top startup ecosystem in Sub-Saharan Africa based on performance metrics such as accumulated tech startup value from exits and funding.

Based on analyses, only 15% of the total start-up funding in the first half of 2024 targeted ventures with at least one female founder.

Though quantified percentage figures of the women-founded or women-led startups in Kenya have not been clearly reported in recent releases, the general trend seems to be that women-founded start-ups are gaining a better pace.

Female-founded startups in Kenya comprised 25% of the overall sum raised by female founders in Africa, a drop from previous years where their share was higher, such as 41% in 2021 and 61% in 2019.

The statistics also indicate that solo or all-female-founded startups gained only 2.3% of the total African startup funding in 2023.

Startup Shutdowns in Kenya (November 2024)

How Many Startups are there in Kenya?

As of 2024, Kenya is believed to have around 1,000 startups operating in the country. This places Kenya among the top Africa countries with startup activity since Nigeria and Egypt have an estimated 3,360 and 2,112 startups, respectively.

A majority of these startups operate in Nairobi, which, on its own, is home to approximately 406 startups, making up to about 93% of Kenya’s total startup ecosystem.

Which African Country has the Most Startups?

By 2024, Nigeria became the African country with the most startups. The country has about an estimated 3,360 tech startups. Egypt ranks second by having an approximate of about 2,112, and third is Kenya having about 1,000 startups.

Other African nations in this startup space are Algeria, Tanzania, Tunisia, and South Africa.

What is the Startup Failure Rate in Kenya?

The failure rate of Kenyan startups is somewhat high, and one report states that 70-80% of them will have failed within their five years.

How Many Unicorns are in Kenya?

By 2024, Kenya will not have unicorns; this is the term used to describe companies valued at over $1 billion. Kenyan startups are yet to achieve this feat.

While Kenya has promising startups which are closing in on the unicorns, M-Kopa and Wasoko, no Kenyan company has ever crossed the valuation mark of $1 billion.

This is likely due to the small size of the local market and the established dominance of fintech leaders like M-Pesa in the local space.

Other Important Kenya Startup News (November 2024)

Kenyan ed-tech startup Eneza Education has merged with Pakistan’s Knowledge Platform to create the world’s first African-Asian blended learning platform.

The merged company will operate under the name Knowledge Platform headquartered in Singapore and will leverage both companies’ strengths to serve over one million learners using mobile, web and SMS technologies.

This platform will provide low-cost educational solutions that combine Eneza’s mobile-based B2C education with Knowledge Platform’s B2B and B2B2C approaches.

M-Kopa has secured a $51 million loan from the US International Development Finance Corporation (DFC) aimed at improving digital connectivity initiatives. The funding was announced as part of President William Ruto’s State Visit to Washington in May 2024. It is one of two tranches forming a $250 million financing package for upgrading digital connectivity and e-mobility in Kenya.

The loan will allow M-Kopa to offer affordable smartphones to underserved communities, opening access to digital financial services for people who are traditionally underbanked. With M-Kopa’s revolutionary financing model, customers buy smartphones through pay-as-you-go payment plans.

M-Kopa operates in several African countries, including Kenya, Uganda, Nigeria, Ghana, and South Africa, having disbursed more than $1.5 billion since it was founded in 2010.

According to the latest Kenya Startup News Reports, Safaricom has teamed up with Pezesha to launch a new credit product called Mkopo wa Pochi, which is specifically tailored for micro and small enterprises in Kenya. Mkopo wa Pochi is available through an update to the M-PESA super app and complements Safaricom’s existing business wallet, Pochi la Biashara.

The product specifically targets over 632,000 active merchants using Pochi la Biashara, leveraging Safaricom’s extensive customer base of more than 32.4 million active M-PESA users.

The loans have a one-time access fee of 2.76% on the amount borrowed. Borrowers have a standard repayment term of 7 days with an option to extend for an additional week at a fee of 3.85% for the whole 14-day period. A penalty of 1% per day is charged on late repayments for up to 7 days.

Kwara has recorded a 35-fold growth in the users of its neobanking app from 2022 to 2023. Kwara’s platform now serves more than 230 credit unions in four countries, covering over 200,000 end clients.

The app allows direct deposits into the credit union accounts of users and tracks finances, which is one of the factors that has led to rapid adoption.

In 2023, Kwara processed an annual transaction volume of EUR 1 billion. The company raised $7 million in seed funding in January 2023.

The London Internet Exchange has announced the expansion of its network with the launch of LINX Mombasa, which will go live in early Q1 of 2025. The new Internet Exchange Point will be located at iColo’s MBA2 facility in Mombasa.

Mombasa is known as the digital gateway for East Africa and is home to some of the major submarine cables in the region, such as 2Africa, SEACOM, and EASSy. This makes it serve not only Kenya but also other neighboring countries like Uganda, Tanzania, Rwanda, and even landlocked countries like South Sudan.

Kenyan electric vehicle start-up Spiro has secured a loan of $50 million from African Export-Import Bank with the aim of enhancing its operation and expanding its financial service offerings especially targeting under-banked populations in Africa.

It is at the Africa CEO Forum that the funding agreement was signed in Kigali. It operates more than 600 battery swapping stations spread over Kenya, Benin, Togo, and Rwanda. Its fleet also goes to over 14,000 electric bikes.

On November 20, 2024, Kenya’s government launched a digital platform officially to support entrepreneurs while increasing the access of available funding sources across the nation. It is part of the DigiKen program to initiate a digital ecosystem in Kenya by empowering Micro, Small, and Medium Enterprises and marginalised communities.

It is a move that will be used in helping 150 Kenyan MSMEs to obtain necessary finance to develop digital platform businesses, which is set to stimulate local entrepreneurship and innovation. The program covers over 20,000 training sessions for government officials who are to lead the digitization of Kenya effectively.

According to the latest Kenya Startup News Reports, By 2027, DigiKen plans to create approximately 4,500 direct jobs and 20,000 indirect jobs impacting over two million users of digital platforms in Kenya.

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