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Five things we learned at Latitude59 Kenya Edition 🇪🇪

What happened when Estonia met Kenya 🤝

Author

Caleb Maru
December 14, 2023

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Tech Safari is all about putting Africa's tech scene on the global map.

And last week, we got to do that in a big way.

For the first time ever in Africa, we brought Latitude59 to Nairobi!

Latitude59 is Estonia's biggest tech event, and Estonia's a tech powerhouse in its own right.

We dived into Estonia’s ecosystem last month, but here’s the crash course.

It’s a tiny country up in Northern Europe, with just 1.3 million people.

But, it’s got 10 tech unicorns to its name - a few you might know, like Skype, Bolt, Wise, and Pipedrive.

Latitude59 has been the heart of Estonia's startup community since 2012, drawing global crowds to root for its tech scene.

They've built a community that brings 3,000+ founders, investors, tech heads, and ecosystem players from all over the world together in Estona each year.

And their next big bet was on Kenya last Wednesday, when Tech Safari hosted Latitude59 in Nairobi and brought over 700 people under one tech roof.

A lot went down. Throughout the day we heard from a lineup of African and the world’s best founders, innovators, investors, and ecosystem players.

We’ve picked out the five takeaways that hit home:

1. Africa's funding game is getting a new look

And the biggest shift? Where investors are putting their money.

Dario Giuliani, the founder of research firm Briter Bridges, broke it down in the first sesh.

First up, it's not just the Big 4 - Nigeria, South Africa, Kenya, Egypt - hogging all the funds.

There’s a second tier emerging, and they’re the underdogs like Ghana, Uganda, Tanzania, Côte d'Ivoire and Tunisia.

But there's also a noticeable shift in the sectors getting attention.

While fintech has had a good run as the darling of Africa-focused VCs, clean tech is the one to watch.

Back in 2021, fintech grabbed a giant 56% of all VC money, but in the first half of this year? Down to 38%.

Meanwhile, clean tech zoomed from a tiny 5% to 15%, and to 26.5% in the first half of 2023.

2. How to Raise a Series A

We had a bunch of workshops going on alongside the main event.

And yours truly got to lead one called "Seed to Scale".

If you’ve tried raising a Series A round, then you know why it’s called the “round of death”.

Unlike Pre-Seed and Seed rounds, cool ideas with potential don’t fly here.

At this stage, investors get really serious about three things:

  • Is anyone loving your product? (traction)

  • Are you making any money? (revenue)

  • And can you turn their investment into a jackpot? (exit potential)

And in Africa, where it's tough to get funding and scale a startup, 84% of VC-backed startups don't hit Series A.

We dug into Africa's Series A funding gap, with these three:

But the session didn't dwell on getting VCs to compete for you.

Instead, we talked about the other options African startups have, beyond the VC path.

Paul used a brilliant analogy to explain this.

He sees VC money as rocket fuel.

And rockets only work in big markets - think huge economies, and loads of customers that spend heavily.

But most African countries aren't the giant-size markets VCs dream of.

Kenya’s GDP, for example, is the same as New Hampshire’s - the fifth smallest state in the US.

So startups need to scale across different African markets to survive and grow - something we covered in the article ‘African startups are playing in hard mode.’

And it’s harder to do it with a VC breathing down your neck.

So the other option? Bootstrapping

Like Paul, Lisa Illingworth - Managing Director at Raise, bets on paying customers as the best source of funding.

She calls it ‘paying your own school fees first’ rather than asking investors to pay them.

3. Africa’s VC space isn’t a boys club

The VC panel at Latitude59

VC is know as a tight-knit boys’ club.

But the crew at Latitude59's VC panel showed us it doesn't have to stay that way.

In the afternoon, we had a session on: What VCs are looking for in this economic state.

Moderated by Yvonne Okafor, co-founder at A+A Collective, the speaker lineup featured these three:

With a ratio of 3:1, plus the moderator, it was almost an all-women show.

Sure, it doesn't paint the full picture of gender diversity across the industry.

But spotting more women on such big VC stages is a solid start.

Right now, around 40% of VCs investing in Africa since 2022 have at least one woman in a top role.

Zoom into Africa-based VCs, and this number climbs to nearly 48%.

If you compare this to the US, where only 19% of VC partners are women, Africa is ahead.

It's a glimpse of change, and it's pretty cool to see.

4. East African Startups are Bringing the Heat

Well, at least they brought it to Latitude59’s pitch competition.

To wrap up the event, nine startups battled it out for a semi-final slot in the Latitude59 2024 Pitch Competition in Tallinn next year.

All of them were super-impressive.

But here are a few things that stood out.

Three of them were female-founded:

  • Toffee Tribe: Turning Kenyan eateries into trendy workspaces for Africa’s remote crew.

Toffee Tribe Co-founder Nginda Ngángá at the pitch competition

  • I am Nativ: Linking Africa's media and creative minds with global opportunities.

  • Skizaa: Helping NGOs and nonprofits nail data collection and analysis in remote African schools.

Three of them were Fintech:

  • Kiotapay – A one-stop platform that lets property owners automate everything, from billing tenants to managing their cash flow.

  • Chumz.io – A mobile saving app that uses behavioral science to make saving easy and fun.

  • Kidaftari: A software that streamlines payments and receipts, and makes bank reconciliations easier for businesses.

But only one is coming with me to Tallinn next year - and that’s:

At only 13%, Kenya’s saving culture is at the back of the pack in East Africa.

But this team, led by Samuel Njuguna, is helping Kenyans become better savers.

They’ve built a brilliant app that allows users to:

  • Save as low as $0.01

  • Set specific saving milestones

  • Get fun saving reminders to save based on their spending habits

  • And earn some interest on their savings, all thanks to a deal with a licensed fund manager

Last month, Chumz crossed 100,000 users on their platform.

They're now setting their sights on Uganda and Rwanda, and are already working on getting licensed there.

They're preparing to pitch to a 3000-person global crowd in Tallinn in May.

And Tech Safari will be there to cheer them on.

5. The Estonia-Africa friendship is just getting started 🇪🇪

And we’re seeing many examples that show how strong it’s becoming:

  • Bolt, a ride-hailing giant, operates in 70 cities across seven African countries

  • Mogo, an Estonian car-financing company, has put over 100,000 vehicles on Kenyan roads

  • South Africa’s Planet42, is a car-financing startup by Estonian founders

  • And it goes the other way, too - Kenya’s Wowzi has hired its entire tech team from Estonia

And of course, Latitude59's Kenya edition is the prime example of this growing friendship.

Kudos to the incredible Latitude59 team for coming all this way and taking a chance on Kenya, especially Liisi Org, Dolores Daniel, Kaspar Kitsing, and Kai Isand.

We’re grateful to have been a part of this and can't wait to have you back again 🙌🏾.

Did you go to Latitude59? How did you find it? Let me know here.

And that's a wrap for this week!

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