How 10 Kenyan start-ups raised Ksh.25 billion in 2024 despite funding slowdown

Kenya’s tech start-up ecosystem saw reduced investment in 2024 compared to the highs of 2022 and the first half of 2023.

In the first half of this year, Kenya—whose vibrant tech ecosystem has long been classified among Africa’s ‘Big Four’ alongside Nigeria, Egypt, and South Africa—led the pack by taking a third of the funding poured into the continent’s start-ups.

Records from the funding database Africa: The Big Deal show that between January and June 2024, Kenyan ventures received $244 million (Ksh.31 billion at current exchange rates), 32 per cent of the $780 million African start-ups raised by then.

This was, however, a 31 per cent drop compared to the second semester of 2023 and a 57 per cent decline contrasted with the funding African start-ups secured in the first half of 2023.

While the complete numbers for 2024 are not out yet, the second half has been just as quiet, with fewer investment deals.

This year also saw a lot of investment poured into Kenyan start-ups in artificial intelligence (AI) and the varied climate tech pool, adding to years of large deals in the financial technology (fintech) and e-commerce fields.

Citizen Digital looks at ten major venture capital (VC) deals in the Kenyan start-up scene this year, in which the companies collectively raised over Ksh.25 billion:

1.      M-Kopa - Ksh.6.6 billion

Asset financing start-up M-Kopa secured a $51 million (Ksh.6.6 billion) debt financing from the U.S. International Development Finance Corporation in May.

The start-up, founded by Nick Hughes, Chad Larson and Jesse Moore in 2010, has been providing underbanked customers in Africa with products such as solar lighting systems, televisions, fridges, smartphones and digital financial services.

M-Kopa’s credit model allows individuals to pay a small deposit and get instant access to everyday products such as electronics, before upgrading to digital financial services such as loans and health insurance.

Customers pay off through micro-instalments over time.

The company is British but Kenya-based, from where it also serves Uganda, Nigeria, Ghana and South Africa.

Kenyan electric vehicle (EV) start-up BasiGo was also among the most funded start-ups in 2024.

BasiGo was founded in 2021 by Jit Bhattacharya and Jonathan Green and provides electric buses for public transport use under a pay-as-you-drive model.

In March, the company received a $3 million (Ksh.388 million) investment from Toyota’s parent company CFAO.

BasiGo followed it up in October with a $42 million (Ksh.5.4 billion) debt-equity Series A funding round, bringing to over Ksh.5.8 billion the total funding the start-up received this year as it works towards delivering 1,000 electric buses in East Africa by the end of 2026.

In April, SunCulture, a Kenya-based start-up providing solar-powered irrigation solutions and agricultural technology to smallholder farmers in Africa, raised $27.5 million (Ksh.3.6 billion) in a Series B round.

The venture, founded in 2012 by Samir Ibrahim and Charles Nichols, operates in Kenya, Uganda and the Ivory Coast.

It provides solar-powered irrigation systems comprising a panel, battery and water pump to farmers under an instalment repayment model.

Kenya-based Swedish EV start-up Roam Motors announced in February that it had secured $24 million (Ksh.3.1 billion) in a debt-equity Series A round.

Roam was founded by Albin Wilson, Filip Lövström and Mikael Gånge and it entered the local e-mobility sector in 2017.

The company specialised in EV conversions until 2021 when it shifted to assembly.

It develops, designs and deploys electric vehicles such as motorbikes and buses tailored for Africa.

Kenya-based insurance technology start-up Pula in April closed a $20 million (Ksh.2.6 billion) series B funding round to scale its agricultural insurance product to farmers in Africa, Asia, and Latin America.

The venture, founded in 2015 by Thomas Njeru and Rose Goslinga, offers insurance covers to small-holder farmers to protect them from losses occasioned by pests, diseases, and climate-related events such as floods and droughts.

Pula has operations in Kenya, Nigeria, Zambia, Malawi, and Mozambique and has sought to expand to Asia and Latin America.

6.      Mawingu - Ksh.1.9 billion

Kenyan internet service provider (ISP) Mawingu in November announced it got $15 million (Ksh.1.9 billion) backing which saw it acquire its Tanzanian counterpart Habari.

The start-up was founded in 2012 and provides shared internet packages in rural and peri-urban areas, targeting homes and small businesses, as well as dedicated connections and services for large enterprises.

Mawingu is Kenya’s fifth largest ISP with a two per cent market share and this is its first international expansion.

Kenyan HR payroll provider Workpay secured $5 million (Ksh.645 million) in a Series A round in August.

Founded by Paul Kimani and Jackson Kungu and launched in 2019, Workpay offers employers a cloud-based platform to process employees’ salaries and benefits, file taxes, and keep track of their attendance and leave days.

Y Combinator-backed start-up also helps businesses with cross-border employees ensure employee compliance across different markets.

8.      Ilara Health - Ksh.543 million

Ilara Health, a Kenya-based health-tech start-up, secured $4.2 million (Ksh.543 million) in debt and equity in February in a pre-Series A round to scale locally.

The business-to-business (B2B) venture was founded in 2019 by Emilian Popa, Maximilian Mancini and Sameer Farooqi.

It seeks to improve healthcare by enabling health centres to acquire pharmaceutical products and other items on credit.

In October, Kenya-based direct air capture (DAC) start-up Octavia Carbon closed a $3.9 million (Ksh.504 million) seed round to remove carbon dioxide from the atmosphere.

The business was founded in 2022 by Martin Freimüller and Duncan Kariuki and seeks to build DAC machines to capture 1,500 tons per year beginning in 2025.

Kenyan e-commerce start-up Chpter in September announced it had secured $1.2 million (Ksh.155 million) in its pre-seed round.

The business was founded by Mesongo Sibuti, Kuria Kevin, Mark Kiarie and Tesh Mbaabu in 2022, but was revitalised this year following the closure of Mbaabu and Sibuti’s other venture MarketForce’s distribution platform RejaReja.

Chpter provides an AI-powered commerce platform to merchants to make them sell more on social platforms like WhatsApp and Instagram by automating conversations, marketing and payments.

It currently operates in Kenya and South Africa.

As for venture capital firms, 2024 saw TLcom Capital close its second TIDE Africa Fund at $154 million (Ksh.20 billion) for the VC to back early-stage start-ups.

This year, Equator Africa, a venture capital (VC) fund focused on the climate sector, also got $5 million (Ksh.646 million) from the International Finance Corporation (IFC) to back early-stage ventures working on green solutions in the energy, agriculture, and mobility sectors.

But in the middle of all this, things were not as rosy for such start-ups like Copia.

The start-up founded in 2013 by former Silicon Valley maestros Tracey Turner and Jonathan Lewis provided a platform for rural consumers to order products delivered by agents.

But as 2024 began, Copia failed to secure additional funding, tossing one of Kenya's most-funded start-ups under financial constraints.

At the start of the year, Copia announced they would cut over 1,000 jobs and also warned of a looming shutdown.

In May, the company stopped operations in six towns. The start-up was placed under administration and two KPMG partners were appointed to help rescue it.

But in September, it was reported that the administrators were selling the company’s assets and winding up operations.

In the backdrop of all this, some analysts point to a stronger funding environment in 2025 after a slow 2024.

Adelaide Njoki, an investment associate at 54 Collective, the VC company formerly Founders Factory Africa, notes that while deal values have been lower this year than in pre-2023, positive market signals in 2024 make increased investment seem likely.

“In the last couple of quarters, the deal value has been increasing month-on-month which is a signal of investments ramping up,” she says.

“Post the funding dry-up, we are seeing the funding rounds of VC companies themselves being oversubscribed, which means investors will have powder to back start-ups come 2025.”

Benjamin Singh, a venture capitalist and host of the Push Your Advantage podcast, believes start-up valuations will not return to where they used to be during the funding boom. Still, he says, some of the ventures that live through the dry-up are likely to raise sizeable capital at well-priced rounds.

“Generally, the market should pick up from where we are but not return to the exuberance of where we used to be,” says Singh.