Tech giants’ entry rattles Kenyan startup industry
Microsoft Africa Development Centre Managing Director, Jack Ngare (left) shows President Uhuru Kenyatta around the newly opened ADC Offices at Dunhill Towers, Westlands, Nairobi. The new facility will house the engineering, design, research, and innovation teams, as well as the Microsoft Garage, an incubation hub launched as part of the ongoing efforts to scale tech innovation in the continent.
What you need to know:
- American tech firm, Alphabet Inc’s Google is the latest entrant into the local market.
- Microsoft recently opened a new Sh3 billion office and labs in Nairobi for its premier engineering hub.
Tech startups in Kenya are facing a shake-up as giant global firms make multi-billion shilling investments in the country as part of a scramble for Africa’s fast-growing digital economy.
American tech firm, Alphabet Inc’s Google is the latest entrant into the local market where it is investing in its first-ever Africa product development centre as it positions itself to serve a growing base of internet users on the continent.
The Tuesday announcement by Google comes barely a month after another US tech major Microsoft opened a new Sh3 billion office and labs in Nairobi for its premier engineering hub, the African Development Centre (ADC), after three years of operation.
It will house the research, design, engineering, and innovation teams as well as the Microsoft Garage, an incubation hub launched as part of the ongoing efforts to scale tech innovation on the continent.
Shortly after the Microsoft announcement, Visa said it had set up its first innovation hub to co-create payment and commerce solutions with partners.
Local startups
Though seen by some as a confidence vote on Kenya, the entry of the tech giants is expected to rattle local startups and mid-size companies who may struggle to compete or retain top talent.
“There will be a need for upskilling by local tech engineers. It is also a win for local engineers who will get competitive packages,” Santos Okottah, founder of Eziki, a streaming platform told Nation.
Globally, the financially well-endowed colossuses have historically tilted the tech markets in their favour because they attract top talent through higher salaries and stockpiles of funding for innovation.
Apart from the remuneration, analysts said, there’s even less of an incentive for workers to leave and set up on their own, which was for a long time a common pathway for entrepreneurs.
If they do leave, the endgame is often to be acquired by their previous employer rather than grow large enough to compete with it.
Suzanne Frey, vice president for products, and Nitin Gajria, head of Google Africa, in a joint blog post said Google is hiring engineers, product managers, user experience designers, and researchers to staff the new centre in Nairobi.
