Limited access to finance, as well as inadequate infrastructure, are among the key factors holding back Kenya’s startup ecosystem, a new survey has found.
The latest Global Startup Ecosystem Index 2024 report published by industry think tank StartupBlink indicates that most startups in Kenya also cited lack of mentorship as a reason for poor performance.
Last year, Kenya dropped one place to 63rd globally in the startup-friendly destination rankings, while retaining third place in Africa, while Mombasa dropped out of the top 1,000 cities in the world for startup investment.
But during the same period, Nairobi’s position improved, rising 24 places to 113th globally, from 137th last year, while Kisumu made its first appearance in the world’s top 1,000 cities, coming in at 985th.
Despite emerging challenges, the report acknowledged that Kenya is an important hub for innovative technology, driven mainly by new solutions such as Safaricom’s mobile money platform M-Pesa.
“Kenya’s leading position as a continent-wide startup ecosystem is all the more impressive given its relatively small population compared to countries like Nigeria,” Startup Blink said in its new report. “With access to a mature economy and a growing entrepreneurial culture, Kenya offers a strong English-language access point to the African market.”
Other strengths of the Kenyan ecosystem, according to the report, include extensive public sector (read government) involvement, with a key highlight being the development of the Konza Technopolis technology hub in Machakos County.
“In addition to public sector efforts, Nairobi is home to regional offices of global tech giants such as Google, Microsoft, Samsung and Intel, making the city attractive to tech startups. The presence of accelerators such as Antler and Pangea Accelerator also contributes to the startup culture,” the report said.