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Kenyan startups remain attractive in Africa

By Moses Omusolo | February 15th 2021

Kenyan has retained its spot as a country with the most attractive startups on the continent after netting more than Sh20 billion last year.

Accounting for 27.3 per cent of the continent’s total investment, the record was previously also held by Kenya, when in 2019 the country’s startups netted more than Sh16 billion.

“This outstanding amount of funding was however raised by…59 Kenyan startups responsible for the investment total,” reveals startup news agency Disrupt Africa in a new report.

At the same time, the study found Kenya accounted for some of the continent’s standout rounds of the year headlined by agri-tech company Twiga Foods which raised Sh3.2 billion, and conservation venture Komaza which raised Sh3.1 billion.

Other notable raises in the country last year went to logistics startup Sendy which mobilised more than Sh2 billion and retail-tech solution Sokowatch mobilised more than Sh1 billion.

Energy ventures SunCulture, Angaza, and Solarise on the other hand managed to raise at least Sh1 billion each.
Moreover, analysed by sector, the most attractive segment is energy which contributed Sh4.9 billion (21.4 per cent of Kenya’s total) followed by agri-tech at Sh3.9 billion (18.7 per cent of the total).

The remaining funds were split between the logistics space Sh2.9 billion (14.3 per cent), e-commerce 2.6 billion (12.4 per cent), and fintech Sh1.8 billion (8.5 per cent).

This as leading rounds last year went to Egyptian e-health venture Vezeeta $40,000,000 (Sh. 4.4 billion), Nigerian fintech Flutterwave $35,000,000(Sh3.8 billion), South African retail-tech startup Skynamo $30,000,000 (Sh3.3 billion).
The revelations are set against the backdrop of improving startup funding on the continent where up to 397 startups raised Sh76.7 billion in total funding.

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This represents a marked improvement on previous years where the number of funded startups rose 27.7 per cent in 2019 as the funding total rose 42.7 per cent higher than the previous year.

“In 2015, only 125 startups secured investment. This figure grew to 146 the following year, 159 in 2017, and 210 in 2018. The number leapt in 2019 to 311, and continued to climb in 2020,” noted the report.

Similarly, the study found the amount of funding going to African startups has increased year-on-year for the past five years.

 “When [our] records began in 2015, the continent’s startups raised a combined $185,785,500 (Sh20.3 billion)... and in 2019 grew 46.7 per cent again to $491,623,400 (Sh53.8 billion)," noted the report.

On another positive front, Disrupt Africa found startups last year recorded some 110 fundraising rounds of $1 million or over.

 “This is a great achievement and shows extraordinary growth over the past six years - 354.2 per cent growth from 2015 to 2020.”

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