Kenyan startups raise Ksh82.5B to top Africa

By , June 9, 2025

Kenya attracted Ksh82.5 billion in startup funding in 2024, reaffirming its status as Africa’s top destination for venture capital, according to the newly released Kenya Innovation Outlook 2024 report.

The funding accounted for 29 per cent of all startup capital raised across the continent, placing the country ahead of regional heavyweights Nigeria, Egypt, and South Africa.  

While the milestone reflects the country’s growing appeal as a regional tech and innovation hub, analysts warn that an overdependence on foreign capital threatens long-term sustainability and resilience.

The report reveals that 81 per cent of the funding came from international investors, exposing a structural imbalance in the ecosystem.  

“The Kenya Innovation Outlook is a mirror and a map. It shows our ecosystem’s growing maturity and guides our next steps toward an inclusive and globally competitive innovation economy,” Tonny Omwansa, CEO of the Kenya National Innovation Agency (KeNIA), said at the launch of the report on June 8, 2025.

He cautioned that while the capital inflows are driving rapid expansion, they also introduce vulnerabilities.  

Foreign investors, he said, often impose short-term expectations and exit strategies that may not align with Kenya’s broader economic development priorities.

The report notes that reliance on international backers leaves Kenyan startups highly susceptible to external economic shocks and shifts in global investor sentiment.  

The absence of robust domestic capital markets and investment vehicles also means that the innovation economy remains externally anchored, limiting the development of homegrown financial ecosystems that could offer more stable, long-term support.

According to the report, much of the 2024 funding boom was driven by large-ticket deals in climate technology. Firms such as d.light, SunCulture, and BasiGo secured major investments, reinforcing Kenya’s leadership in the region.  

Heavy centralisation

In East Africa, the total startup funding reached Ksh93.8 billion, with Kenya accounting for 88 per cent of that amount.  

However, this dominance also highlighted a heavy centralisation in Nairobi, with over 75 per cent of business development service providers operating in the capital.

This concentration continues to marginalise startups in other counties, hampering the decentralisation of innovation.

“This outlook confirms that ecosystems flourish when they are collaborative, decentralised, and inclusive,” Ian Lorenzen, Executive Director of GrowthAfrica, said.  

The report suggests that a more balanced national innovation infrastructure is necessary to achieve equitable growth and unlock the full entrepreneurial potential across the country.

Gender disparities in financing also remained entrenched. Women-led startups received just 12 per cent of the total funding, underscoring persistent challenges in accessing capital, mentorship, and market linkages.  

The low figure reflects structural barriers that continue to limit female entrepreneurs’ ability to grow and compete effectively, despite ongoing efforts by the public and private sectors to promote inclusion.

Unresolved policy issues further complicate Kenya’s innovation environment.

The Startup Bill, which seeks to establish a formal regulatory framework for startups, remains stuck in legislative limbo.  

Without clear legal and policy guidelines, entrepreneurs face a fragmented operating environment that discourages long-term local investment.

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