The year of Kenyan startups: 13 tech companies raised over Ksh.25B from global investors

2021 has been an overall big year for African startups, especially fintechs, if the recent efflux of funding from Global investors is anything to go by.

A Digest Africa database on early-stage investments across Africa projected a staggering $906M (Ksh.102 billion) capital raised in just the third quarter of this year.

This, according to the database, marks an over 60 per cent spike in venture money poured into the continent in the third quarter, and more than all other sectors combined in the first half of the year.

Another analysis by BFA Global’s Catalyst Fund revealed a 29 per cent growth in funding for African fintechs alone, from $385M (Ksh.43B) in 2018 to $1.35B (Ksh.152 billion) in 2020.

Big names in venture capital such as America’s Tiger Global and Harlem Capital; Japan’s SoftBank; Kepple Africa; Samurai Incubate Africa; Australia’s TEN13 and China’s Sequoia Capital have come up in African startups funding stories in the last two years.

According to some experts, the recent fintech surge across the region is down to the fact that the sector quashes the poor physical infrastructure challenges which have marred business activities in Africa for years.

In Kenya, the story this year is quite the same, with over Ksh.25 billion ($222 million) in seed capital raised by just 13 firms that we looked at.

From fintech to insurtech, here are other start-ups which had a big 2021:

Popular lender Tala hit the headlines in October when it raked in over Ksh.16.3 billion ($145M) through a Series E funding led by Upstart.

The loan app, which was first launched in Kenya in 2014 to offer credit and collateral-free loans to consumers and small business owners, has since expanded to the Philippines, Mexico and India.

Tala told reporters that the funding would go towards growing its team across the four markets and its headquarters in the U.S.

Twiga (Ksh.5.6B)

E-commerce food distribution platform Twiga raised Ksh.5.6 billion ($50 million) from a Series C round to scale its efforts across the country and other neighbouring countries.

Twiga said the funding, which came after the company’s Ksh.3.3 billion ($30 million) Series B round - Ksh.2.6 billion ($23.75 million) equity and Ksh.695 million ($6.25 million) debt — in 2019, would be used to roll out low-cost manufactured food and non-food products under its brand before the end of the year.

Twiga claims to have over 100,000 registered customers and delivers to 10,000 clients daily. It also boasts of 700 employees and has a network of over 8,000 farmers.

Pula (Ksh.674M)

Insurance technology start-up Pula closed a Series A investment of Ksh.674 million ($6 million) in January in a round led by TLcom Capital.

Pula focuses on agricultural insurance digital products for smallholder farmers in an effort to mitigate climate risks, improve farming practices and boost returns.

Kwara (Ksh.451M)

In December, Kenyan fintech Kwara secured Ksh.451.6 million (US$4 million) in seed capital to help SACCOs in the country shift to online banks by providing them with its proprietary Back-end-as-a-service (BaaS) software.

The money, Kwara said, would enable it build a neobank app to enable individuals sign-up with their preferred SACCO to access various financial services, expanding the unions’ methods of signing up new members and help them shift away from tedious paper-based systems and the need for elaborate brick-and-mortar branches.

“We want to make credit unions as efficient as they can be by giving their members the kind of neobank experiences they wish to have,” Kwara co-founder and CEO Cynthia Wandia told TechCrunch.

Wowzi (Ksh.321M)

Wowzi, a platform which turns social media users into brand influencers, also had a good end to the year after acquiring Ksh.321 million ($3.2 million) in December.

The capital was the sum from a seed round led by 4DX Ventures, which raised Ksh.226M ($2 million) and an earlier Ksh.135M ($1.2 million) pre-seed round.

Wowzi said the seed would go towards setting up operations in Ghana, Nigeria and South Africa, as well as exploring more opportunities beyond Kenya, Uganda and Tanzania, where it currently operates.

The platform links brands with social media users for marketing campaigns, a bold departure from the use of celebrities.

It argues that using regular internet users to push products on their social media platforms creates “more authentic engagements or product endorsements.”

Pariti (Ksh.320M)

Pariti, a community-led marketplace building the digital infrastructure for start-ups, raked in over Ksh.320 million ($2.85M) in December from American venture capital firm Harlem Capital.

The company connects start-up founders in emerging markets to resources, talent and capital through an online platform where freelance consultants conduct deal management and due diligence functions for companies.

According to its co-founder and CEO Yacob Berhane, the funding would allow it to build SaaS workflows to aggregate multiple forms of raising capital, from traditional equity and debt to DeFi solutions

Wapi Pay (Ksh.244M)

Wapi Pay, the Kenyan fintech start-up owned by the Ndichu twins Paul and Eddie, raised Ksh.244 million ($2.2 million) pre-seed investment in August to scale up global payments and remittances between Africa and Asia.

The firm facilitates payments in Africa and Asia via mobile money platforms and bank accounts.

Wapi Pay, which claimed a 396% year-on-year growth since 2019, reportedly works with local banks and platforms in China, Indonesia, India, Japan, Malaysia, Philippines, Singapore, Taiwan, Thailand and Vietnam.

The investment involved venture firms MSA Capital, EchoVC, Kepple Africa and Future Hub Transsion Holdings and Gobi Ventures.

Kepple Africa Ventures, however, relinquished its investment stake in Wapi Pay in October following a viral video appearing to show the Ndichu brothers in the middle of a scuffle at a Nairobi hotel.

Takahiro Kamisaki, Kepple Africa Ventures’ General Partner said the Japanese VC firm has zero tolerance for incidents of assault.

Asilimia (Ksh.225M)

The Kenyan start-up secured over Ksh.225 million ($2 million) pre-seed in November to expand its financial lending services app Leja.

Asilimia enables traders to make mobile money transactions that are devoid of transfer and said the capital would enable it to extend loans to traders in informal businesses, who are regarded as high risk by the traditional banks.

MarketForce (Ksh.225M)

MarketForce, a tech start-up seeking to digitize Africa’s mostly cash-based retail payments, in July announced the close of its Ksh.225 million ($2 million) pre-Series-A round.

The tech firm, through its B2B a B2B e-commerce marketplace RejaReja helps informal retail merchants buy and sell FMCGs and digital financial services and boasts of a client base of such companies as Pepsi, Safaricom and Platinum Credit, among others.

MarketForce said it was planning to launch RejaReja in Nigeria and increase it across more towns in Kenya, Uganda, and Tanzania.

Lami (Ksh.202M)

Lami Technologies, a Kenyan insurance technology firm which uses a B2B2C approach to facilitate the distribution of insurance, raised over Ksh.202 million ($1.8 million) seed money in May from a round led by Accion Venture Lab.

Lami uses an API, to enable businesses like banks, start-ups and organizations to offer digital insurance products to their users.

The product can also be used by partner businesses to manage their own insurance needs.

Lami has worked with companies like Britam, Pioneer and Madison Insurance and told TechCrunch that it would use the seed investment to hire more people, improve its technology and grow its presence across Africa.

AIfluence (Ksh.112M)

AI-driven influencer marketing firm AIfluence raised over Ksh.112 million ($1 million) in a July seed investment led by Dubai-based EQ2 Ventures.

The company matches influencers to brands, runs end to end influencer marketing campaigns and brings transparency to the measurement of impact.

AIfluence’s platform is built on a trust network model where it deploys thousands of nano influencers and followers who have a natural affinity to a brand and exhibit a high emotional connection with the target audience, according to TechCrunch.

At the time, the firm said it was working on a SaaS offering that would “place the power of the platform in the hands of its customers.”

Kune (Ksh.112M)

Food-tech start-up Kune closed a Ksh.112M ($1 million) pre-seed round in June ahead of the launch of its on-demand food service in August.

Led by Pan-African venture capital firm Launch Africa Ventures,the pre-seed round saw  participation from Century Oak Capital GmbH and Consonance, and a contribution from Pariti.

Kune meals are freshly cooked and packaged in its factory and delivered directly to online, retail and corporate customers at arguably affordable prices.

Craydel (Ksh.112M)

Craydel, a Kenyan platform for comparing colleges, course options and tuition fees, raised over Ksh.112 million ($1 million) in a pre-seed round led by Enza Capital in November.

The firm said the money would be used to improve its search and recommendation technology and enhance its online resources to help students and professionals in decision making.

Hello Tractor

Also worth noting is that in September, Kenya and Nigeria-based agri-tech startup HelloTractor won a Sh165 million ($1.5 million) grant jointly with Nigeria’s ColdHubs.

The grant by Heifer International was a recognition for the start-up’s creative technology aimed at improving smallholder farms.

Hello Tractor has been described colloquially as ‘Uber for tractors’ and provides technology that allows farmers to connect with local tractor owners through an app and book equipment.