Kenyan tech start-ups raise billions from Foreign Investors

Kenyan tech start-ups attracted more funding from international investors compared to peers within Sub-Saharan Africa’s market area – in 2017, a new report shows.

The country’s 27 tech firms received a total of Sh14.7 billion ($147 million), and were only surpassed by South Africa, which received Sh16.79 billion ($167.9 billion) for its 42 start-ups.

The latest report on the mobile economy in Sub-Saharan Africa by Groupe Spéciale Mobile Association (GSMA) indicated that there were 355 active tech hubs across Sub-Saharan Africa and nearly half of them are in four countries -South Africa, Kenya, Ghana and Nigeria.

“Kenya, Nigeria and South Africa remained the most popular investment destinations, accounting for 76% of the total funds raised by start-ups in the region,” the report stated.

However, the report indicated that there was a downward trend in the combined share of investments for the three markets, from more than 80% in 2015 and 2016, which shows growing investor appetite for other markets particularly – Ghana, Rwanda, Senegal and Uganda.

This year has already seen a number of high-profile funding injections, including a Sh350 million ($3.5 million) investment in a Nairobi-based customer feedback platform mSurvey – to fund its expansion into Nigeria and South Africa.

Also, local mobile solutions start-up Africa’s Talking, raised Sh860 million ($8.6 million) through a series A-funding, led by the International Finance Corporation (IFC), alongside Orange Digital Ventures and Social Capital.

Last year, 124 tech start-ups across Africa raised a total of $560 million (Sh56 billion), a 53% increase over the previous year. Of this, Sub-Saharan Africa accounted for about $515 million (Sh51.5 billion) – in more than 100 deals.

The report conveyed that the range of tech start-ups funded, as well as the growing size of deals -reflects the accelerated development of Sub-Saharan Africa’s ecosystem.

Source: African Strategic-Ventures (ASV) & Business Daily Africa.