Kenya
Nairobi
"The momentum of Nairobi’s startup ecosystem is growing, with an increasing number of hubs and talented entrepreneurs."
Highlights
Nairobi dominates Kenya’s startup ecosystem and is one of the leading tech cities in Africa. The capital city is home to 97% of the country’s startups, as well as regional offices of many multinational companies. Google, Microsoft, and Visa all opened research and innovation centers in Nairobi in 2022.
In November 2022, IXAfrica Data Centre struck a deal with Helios Investment Partners to invest in the build-out of a campus in Nairobi to deliver 20MW of hyper-scale-ready capacity. Africa Data Centres is expanding its existing data center in Nairobi to 5X current capacity.
In January 2023, VC fund and accelerator Catalyst Fund announced a $2 million investment into 10 startups working on improving the resilience of climate-vulnerable communities in Africa. The Nairobi County Government will issue a green bond of $1.2 billion to finance environmental infrastructure and accelerate the green transition. Under the UK-Kenya Strategic Partnership, the UK Government will commit KES 2 billion ($16.4 million) to lower investment risk and unlock KES 12 billion ($98.6 million) of climate finance for Kenyan projects. At COP27, UK Prime Minister Rishi Sunak promised to expedite new green investments in Kenya. The flagship project, BasiGo, has raised $11 million over four rounds. Sun King, which sells, installs, and finances solar home systems, has raised $577 million over nine rounds, and raised sub-Saharan Africa’s biggest round in 2022 in a December $260 million Series D.
Ecosystem by the Numbers
Sub-Sector Strengths
Fintech
Nairobi is Kenya’s Fintech hub. In July 2022, President Kenyatta launched the Nairobi International Financial Centre (NIFC), an initiative designed to make it easier and more attractive to invest and innovate in financial services. NIFC aims to raise over $2 billion by 2030. Connected asset financing platform M-KOPA has raised a total of $263.6 million over 16 rounds. Advanced lending solution Credrails raised a $2.5 million seed round in February 2022. Savings app Koa raised $2.4 million in venture funding in March 2022.
Agtech & New Food
In Kenya, Agtech ranks second behind only Fintech in job creation and is responsible for creating 18% of startup jobs. In June 2022, Heifer International Kenya launched the AYuTe Africa Challenge Kenya to promote and reward Agtech innovation. The World Bank with Korea World Bank Partnership Facility, the Korean Green Growth Trust Fund, and Plug and Play Tech Center, launched the Africa-Korea Agtech Innovation Challenge to identify disruptive Agtech innovators in Kenya and Uganda. Apollo Agriculture, which helps small-scale farmers maximize profits, raised a $40 million Series B in March 2022.
Ecommerce
Kenya boasts 29 active e-commerce startups, all of which are based in Nairobi. Consumer-facing, multi-product e-commerce platforms and B2B retail-tech solutions are particularly active sub-categories. Kenya’s e-commerce startups collectively secured $230 million in funding in 2022. Retail tech startup Wasoko has raised a total of $143.6 million over 11 rounds, including a $125 million Series B in March 2022.
Reasons to Move Your Startup to Nairobi
Market Opportunity
With 4.4 million residents, Nairobi is a vibrant commercial hub that is home to the regional headquarters of many global companies. Kenya’s membership in regional economic blocs and its strategic geographic location makes it an ideal gateway to Eastern and Southern Africa. Kenya benefits from several preferential trade arrangements, including the African Growth and Opportunities Act, which allows duty-free access to the U.S. market for over 6,000 items, as well as the Africa Caribbean and Pacific-European Union Economic Partnership Agreement, which provides duty-free access to the EU.
Growing Tech Community
Kenya’s Vision 2030 economic blueprint established the Konza Technopolis City project, aimed at creating a hub of technology innovation in Africa. The initiative has propelled the growth of tech hubs and coworking spaces in Nairobi. Tech giants Microsoft and Visa have set up innovation hubs in Kenya, and Google launched its first product development center in the country. AmazonWeb Services announced AWS local zone cloud infrastructure. Several other global tech companies have announced plans to open offices in Nairobi.
International Environment
Expats generally feel at home in Nairobi. In the 2022 Expat City Ranking the city placed #6 in the Ease of Settling in Index, with 66% of survey respondents saying making local friends is generally easy and 29% finding it very easy. Nairobi was ranked among the world's top 30 prime cities by real estate giant Knight Frank in its Prime Global Cities Index 2022. Knight Frank deemed Nairobi one of the most attractive cities in Africa for expats and firms looking to invest in the continent.
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