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Global report blames limited financing for Kenyan start-up woes

Global report blames limited financing for Kenyan start-up woes

Limited access to funding, as well as inadequate infrastructure, are among the key factors holding down the takeoff of Kenya’s startup ecosystem, a new survey shows.

The latest “Global Startup Ecosystem Index Report, 2024” published by sector research centre StartupBlink indicates that most startups in Kenya also cited lack of mentorship for poor performance.

Last year, Kenya dropped one spot to 63rd globally in the rank of startup-friendly destinations while retaining its third place in Africa, at a time Mombasa dropped off from the world’s top 1,000 preferred cities for startup investments.

During the same period, however, Nairobi improved, climbing 24 places to position 113 globally up from 137th last year, while Kisumu made its debut appearance to the global top 1,000 list, after it took the 985th position.

Despite the budding challenges, the report has recognised Kenya as a significant innovative tech hub that’s chiefly buoyed by novel solutions such as Safaricom’s mobile money platform M-Pesa.

“Kenya’s pioneering status as a leading continental ecosystem is even more impressive considering the relatively low population compared to countries such as Nigeria,” StartupBlink said in its new report. “With access to a mature economy and a growing culture of entrepreneurship, Kenya offers a strong English-speaking point of access to the African market.”

Other strengths of the Kenyan ecosystem, according to the report, include the extensive involvement of the public sector (read government) with the key highlight being the development of the Konza Technopolis tech hub in Machakos County.

“Besides public sector efforts, Nairobi is home to regional offices of global tech giants like Google, Microsoft, Samsung, and Intel, which makes the city attractive to tech startups. Also, the presence of accelerators like Antler and Pangea Accelerator contributes to the startup culture,” reads the report.

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