Kenyan start-ups were the second most attractive to funders in 2022 in Africa after 63 small and medium enterprises raised Sh62.4 billion in the year, a new survey shows.
Disrupt Africa also found in the survey that 242 firms secured investment between January 2015 and mid-November 2022.
“Those start-ups secured a combined $1,281,918,200 (Sh158 billion) between them, a figure bettered in that time only by Nigeria,” says the firm.
The Kenyan Startup Ecosystem Report 2022 shows that 63 firms had raised a combined $506,686,000 (Sh62.4 billion) in seed capital funding as of November 2022, compared to $291,983,000 (Sh35.8 billion) raised in 2021 and $47,365,000 (Sh5.7 billion) in 2015 when Disrupt Africa records began.
This year is already record-breaking for Kenya at a time companies are gradually recovering from the tough economic situation that led to a number of businesses ceasing operations. At least 308 tech start-ups were in operation across Kenya as of November 2022, employing more than 11,000 people between them.
Fintech is the most populated sub-sector of the Kenyan start-up space in terms of levels of activity with 93 firms, making up 30.2 percent of the country’s ventures cementing its ability to solve fundamental problems at a time tech solutions are received well and quickly adopted.
The improved ranking of Kenya owes to the Capital Markets Authority’s friendly fintech regulations that allow fintechs to test innovations in an environment where the regulator helps them to notice flaws in innovations at the early stages.
This places Kenya among the high-interest hubs for venture capitalists on the continent, with the local start-up ecosystem moving from fourth position last year to second in 2022, after Nigeria.
“Kenya’s growing economy is home to the most resilient and innovative start-ups in Africa. These start-ups, solving problems common to Africa as they are in Kenya, cannot scale if making and receiving payments is an arduous task. Our payment rails enable global and local businesses to accept and make payments easily, paving the way for their growth,” said Akshay Grover, Group CEO at Cellulant.
M-Kopa Solar has bagged the largest funding so far of Sh8.5 billion ($75 million), compared to the $85 million raised by Gro Intelligence in 2021.
This article was first published in the Business Daily