Kenya's Tech Scene - both big and small

Morning!

We have a whole bunch of new subscribers since that viral Paystack Mafia post and last night's speed dating event.

So hello to all of you 👋🏾

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Speed Dating in Nairobi 🇰🇪

I’ve spent the last week in Nairobi, and it’s been amazing to see the tech scene first hand.

Last night we hosted a founder speed dating event with over 100 founders, investors and operators in Nairobi.

The best part was watching everyone quickly exchange phone numbers before moving to the next partner.

And apparently that's my thing now - I'm the speed dating guy.

Speed dating aside, I’m pumped about this week’s edition.

It’s the first in a series with Preamble - a media company that makes data on Africa look incredible. I always look out for their visuals when they drop - Check out Preamble here.

In the series we will be visualising and analysing African countries and their tech ecosystems.

And this edition is dedicated to Kenya 🇰🇪 - AKA, The Silicon Savannah. We’ll be diving into the data and stories behind Kenya’s tech ecosystem.

Let's start by getting acquainted with..

The Silicon Savannah

Kenya's tech ecosystem is an African tech success story. As of 2020

• 98% of Kenya’s population had a mobile phone (the global average is 67%)

• 59% of the population has internet access.

• Mobile money (called M-Pesa) was introduced in 2007 is used by 96% of Kenyan households. (no one wants to take my cash here)

• 4G Internet covers 77% of the Kenyan population, with 3G covering 94%.

East Africa’s economic hub is Nairobi, the capital city of Kenya - also known as the Silicon Savannah.

Nairobi has been ranked in the top 50 greatest cities of 2022 by TIME, and is a close second to Lagos for the best tech hub in Africa.

Startups, leveraging the adoption of technology have, raised over $1.9b since 2019.

This is over 19% of total funding for African startups, with most of those startups raising their largest rounds in 2022.

And with the funding and talent growth in the country, Big Tech is doubling down on Nairobi.

This year saw huge announcements for the city:

• Microsoft launched a $27m African Development Center in March, hiring 450 people.

• Google announced a Product Development Hub, and will hire 100 people in the city.

• Visa is launching an ‘Innovation Hub’ in Nairobi later this year.

• AWS also plans to set up a hub in Nairobi

So, Nairobi is a thriving ecosystem with a lot of potential on the radar. Let’s look at some of this year’s highlights

Kenya’s Fintechs of 2022

Shout out to The Big Deal for this data.

So there are a few reasons we’re exclusively covering fintechs that raised in 2022.

Actually there's just one - we didn't have space on the images to cover other industries 😅

We may come back to other industries in a future edition. Until then, let's dive into Kenya’s top fintechs.

I did a bit of field research, asking founders and investors about how Kenya’s tech ecosystem has evolved over the years.

Two of the ecosystem’s OG investors are Neha Shah and Poonam Vora from Rafiki Ventures and Maitri Capital, who have been investing since 2017.

Poonam explained that in the early days, majority of the funds in Kenya and East Africa were impact focused. Acumen and Novastar, amongst others were one of the first funds to actively invest in the region.

And while they still have an impact-mandate, new VC funds and more ecosystem players have emerged more recently, as well as budding Angel investors.

Back then, the companies that were able to raise were tech enabled business with often more experienced founders.

In the last few years, that has shifted to younger founders running pure tech startups, accelerated by Covid and the need for pure-tech solutions.

Poonam estimates that there are now over 800+ funds investing in Africa from VCs, to family offices, to Angel groups.

The Ecosystem Accelerates

In every tech ecosystem, there are a handful of startups that lead the charge and push the scene forward. In Australia, that was Atlassian.

And talking to Jason Musyoka (Manager at ViKtoria Ventures) one of the most influential companies behind Kenya’s tech ecosystem is Cellulant.

Cellulant is a fintech that gives merchants alternative ways of collecting payments. My MPesa transaction to get dinner delivered to my door with UberEats was powered by Cellulant.

The company has been around since 2004, has made a lot of pivots over the years and are now gearing up to raise a $100m Series D.

Tatenda Furusa also worked at Cellulant before he started ImaliPay - a fintech that lets gig workers access fintech services.

Tatenda explained that Kenya’s tech scene really started to blow in 2018, and has been accelerating as startups in Kenya can access more capital.

While it’s generally hard to raise funds in Africa startup, Tatenda found that was easier in Kenya.

'Kenya is the melting pot of Africa with lots of business travellers, advisors and VCs passing through and interacting with all spheres of the economy. You're likely to meet someone who knows someone.'

ImaliPay raised a $3m USD seed round in 2022 from a lineup of global and local investors, like Ten13, Jedar Capital, Plug N Play, Poonam and Neha’s Maitri Capital and many more.

Kenya's Ecosystem: Both big and small

What I love about Kenya is that it’s both big and small. There is so much happening, and everyone is only one degree of connection away.

I think that’s the power of building in Kenya - theres a lot of opportunity and potential, but everyone is connected and supportive.

What do you think of Kenya’s tech ecosystem? Hit me back with an email, would love to hear your takes.

Want more fintech in your life?

You’ve heard all about how hot Fintech is in Africa, but how often do you actually meet fintech founders?

In two weeks I’m hosting a African Fintech Demo Day, featuring some of the most impressive early stage fintech startups on the continent.

This is closed to investors, but I’m letting members of the Prox Weekly community join in.

Sign up to attend here - just enter in ‘Prox Weekly’ in the 'who referred you' section.

Thanks for tuning in. And if you want one of these dope t-shirts, sponsored by Daba finance, refer a few of your friends 👀

I'll be taking a break next week, but catch you the week after!

Caleb