Kenyan start-ups raised Sh43.5 billion ($428.91 million) last year, a fundraising tracking firm has revealed.
According to the 2019 funding report by WeeTracker, Kenya came only second to Nigeria in the amount received during the year, indicating the attractiveness of the country to deal financiers.
Companies in fintech and agritech topped in terms of the destinations of the investment, a trend they have maintained for several years according to the report.
“The usual suspects as per sectors also remained the same as fintech and agritech as they emerged as the top sectors. Similar to 2018, the highest amount of investment went to a fintech company,” said the South Africa and Nairobi based firm.
It added logistics companies also “got a significant piece of the pie, getting more number of deals than both fintech and Agritech. Overall, the number of deals in each also just slightly increased”.
The investment volume went up by close to 300 per cent with the gross escalation partly attributable to big-ticket deals of more than $40 million (Sh4 billion). The top three companies in clinching the deals were mobile money lender Branch, energy solutions firm Bboxx and medical expenses management outfit CarePay. Branch raised Sh17 billion ($170 million) in both equity and loan from American digital payments firm Visa and other investors for on-lending to customers.
“The Silicon Savannah is still one of the top destinations attracting deal flows, second only to Nigeria in the amount received. In comparison to figures from 2018, the number of deals in Kenya were more or less the same, with this year recording 72 deals, down from 77 in the last year,” said the tracking firm site.
The WeeTracker report says that African start-ups got a total of $1.34 billion (equivalent to Sh135.9 billion).
Organisations that have been giving the funding in Kenya and around the African continent include World Bank’s private financing arm International Finance Corporation, the Tony Elumelu Foundation, the Melinda Gates Foundation, African Women’s Development Fund, Acumen Fund, CDC, Helios Investment Partners, Norfund and Seedstars Africa.
The Tony Elumelu Foundation, for example, has pledged to assist up to 10,000 start-ups to obtain funding to the tune of $100 million (Sh10 billion), a part of which has already been released to at least 6,000 firms in the past six years.