A recent report has unveiled a notable trend in the investment landscape, showcasing that the majority of funding directed towards African ventures in 2023 flowed into Kenyan start-ups. ‘Africa: The Big Deal’ report highlights that among the ‘Big Four’ economies in Africa—Kenya, Nigeria, Egypt, and South Africa—Kenya’s start-up ecosystem secured the lion’s share of investment funding.
According to the report, in 2023, four African countries collectively attracted 87% of all start-up funding on the continent, with Kenya leading the pack. The data reveals that Kenya’s portion of investment in Eastern Africa rose from 86% in 2022 to an impressive 91% in 2023. During this period, 93 Kenyan start-ups successfully secured funding exceeding $100,000 (equivalent to KSh 15.8 million).
Examining the broader trends in start-up funding, the report notes that 2023 witnessed the ‘Big Four’ economies recording their most substantial funding share since 2019. Despite this positive trend, the African tech ecosystem faced challenges throughout the year, marked by a difficult operating environment. Factors such as rising inflation, weakening currencies, and unfavorable interest rates compelled foreign investors to divert capital away from emerging and frontier economies.
A noteworthy development contributing to the success of Kenyan start-ups was the Google Black Founders Fund. The third edition of the fund in 2023 selected 25 African start-ups, with five Kenyan firms among the beneficiaries. These selected start-ups are set to receive funding exceeding KSh 21 million, further boosting the growth and innovation within Kenya’s entrepreneurial landscape.
