by Réna Kakon. October 2022.
In this article I’m sharing my insights about Kenya’s startup scene and tips about Nairobi. I spent 1 month there this summer, meeting entrepreneurs, building our network of co-investors, reconnecting with my former colleagues from Fenix (all are off to new entrepreneurial adventures!), and working remotely from Nairobi.
and…yes… I couldn’t resist hiking up another famous African peak… Mount Kenya 😅🏔😅. WoW.
Quick facts about Kenya
👨👩👧👦 Population: 54M, 2/3 of the population live in poverty making less than $3.20 per day.
💹 GDP: over $100 billion in 2022, attaining lower-middle income status.
📲 Mobile phone penetration: 86%, and in Nairobi about phone penetration 99%.
🌐 Internet penetration: 95% of Kenyans in urban areas.
💸 Mobile money penetration:
- M-Pesa represents 90% of the GSM network.
- 70% of the country’s GDP is flowing through M-Pesa…😅
- M-Pesa makes $1 billion in annual revenues, you can read a recent interview of their CFO by McKinsey.
- Distinctive tech initiatives: ASSEK (association of startup and SMEs enablers of Kenya), and Startups Savanna are supporting the ecosystem of Kenyan startups. In 2022, Google, Microsoft and Visa launched initiative to stimulate the research and development in Kenya:
- Google product development center opening in Nairobi, its first in Africa
- Microsoft’s research and development center in Nairobi
- Visa setting up a center to co-create payment and commerce solutions with partners.
- Government tech policies: Kenya’s Startup Bill 2020 inspired by the Tunisia’s Startup Act and aiming to provide several benefits to startups. It’s a fail…
- Leading Industries: The agricultural sector is the backbone of the economy (33% of GDP).
- Energy access: Kenya has one of the most developed power sectors in sub-Saharian Africa, with abundant renewable energy.
- Current energy access rate: 70-75%
- Nairobi has reached almost 100% renewable energy (majority of it comes from hydro). Let’s invest in EV?
Startups Scene in Kenya
- Startups that raised +$1M: 🏆 Kenya ranks #3 in Africa for deals of more than $1M
Founder Interview - Paul Kimani, founder of WorkPay
- Ride-hailing company: Uber - you absolutely need an M-Pesa mobile money account to pay your driver, they don’t have change if you pay cash, and they won’t come pick you up if you pay by card for short distance.
- Telcos: We recommend getting a Safaricom SIM card at the airport and create a mobile money account immediately. You can’t go very far without Mobile Money in Nairobi.
- Cost voice & data: $9 for 400 mins + 5GB + free WhatsApp.
- Cost of airport to city center taxi ride: $9 - make sure to leave early to catch your flight and take the express way, the traffic is horrible.
- Cost of Airbnb for 1 month: $800-$1500 for a nice 1 bedroom, good location. There are lots of good options. I recommend staying in Westlands.
- Cost of a meal: $10-$30.
- Favorite co-working space: Our absolute favorite is AfricaWorks, it’s offering serves corporate and late stage startups. For a startupee environment, check out Nairobi Garage, they host cool events and they have many locations around town. For remote workers looking for a quite place, I absolutely loved Ikigai in Westlands, there is such a lovely garden & coffee shop and outside sitting (check out the video).
- Favorite coffee shops: Barrista & Co (good food as well), le Grenier à Pain (for meetings & a croissant), Kesh Kesh Coffee Roasters & Café (Ethiopan food, outdoors sittings)
- Favorite restaurants: Cultiva Farm (farm to table, Karen), Haandi (Indian, Westlands)
- Favorite hiking spots & resources: Hike Maniak is a nice group for hikes around Nairobi, I like Mona trails or Elephant Hills. For something in the city check out Karura Forest, and you can grab food at The River Cafe.
- Safety: Just be smart about it, don’t walk alone at night with valuables.
Some Final Thoughts
At the end of the day, Kenya’s tech is still a relatively small ecosystem quite easy to navigate. As a foreign investor I felt welcomed and it was easy to connect with great entrepreneurs and investors willing to co-build a stronger ecosystem. One of my pet project in order to contribute to the local tech scene is to make it easier to navigate stock options and secondary markets for founders and employees of startups in each country I travel to. It takes time, but I’ll get there!
Nairobi is a convenient base to travel in East Africa. That said, it is not my favorite city as it is not very walkable and incredibly jammed (well, like most African cities urban planning is challenging).
If you are looking for a deep dive, Startup Guide does a nice job at consolidating all you need to know about the local startup scene.