Kenya accounts for 84% of all startup funding raised in Eastern Africa since 2019

Eighty-four percent of all funding channeled towards startups in the Eastern Africa region since 2019 has gone to the Kenyan startup ecosystem, new data shows.

Startups in Kenya, Tanzania, Burundi, Rwanda, Uganda, Somalia, Ethiopia, Madagascar, Sudan, Eritrea and Djibouti have collectively raised over $2.3 billion (Ksh.2.7 trillion) since the start of 2019 to the end of May this year.

According to statistics from Africa: The Big Deal database, this is just under a quarter of all the funding raised by start-ups in the continent.

The report further shows that so far this year, Kenyan startups had secured around Ksh.92 billion ($780 million) at the close of May, which is 93% of all funding invested in Eastern Africa in 2022.

“Of the 10 $50m+ deals recorded in Eastern Africa since 2019, 9 were in Kenya… Tanzania along with Uganda are the only other two markets to have attracted more than $100m in total funding since 2019,” the report stated.

Combined, Kenya, Tanzania and Uganda leave very little room to their neighbours, accounting for 96% of all the funding raised in the region since 2019.

The report projects that the Eastern Africa region is set to break a new record in terms of annual funding raised at the close of this year.

“​​After a small dip in 2021, (the region) is having a very strong beginning of 2022: start-ups in the region have already raised nearly $850m (as of May 31st), which is already 50% more than they had raised in the whole of 2021,” it added.

Kenya has lately been positioning itself as a regional technology hub and a destination for multinational tech giants as well as global venture capital firms who are pouring millions into local startups.

Google recently became the third company to set up a hub in Nairobi within the past three months, after global digital payments giant Visa and American tech powerhouse Microsoft.

Additionally, Kenya and Uganda were last month ranked among 15 African countries whose financial, health and climate-linked start-ups have the biggest impact potential in Africa.

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.