Bumper year for Kenyan startups as 18 companies raise Ksh.21 billion

Kenyan startups have in the last couple of years been ones to watch on the continent, flying high in Africa’s ‘Big Four’ club alongside Egypt, Nigeria and South Africa.

The Kenyan start-up scene began this year at a high, topping the 2021 numbers by March. Kenya has this year recorded a 2.5 times growth from last year, according to data from startup funding tracker Africa:The Big Deal. 

This is after a disappointing 2021, in which it was the only one of the Big Four to suffer a decrease in funding raised between 2020 and 2021 with a 25 per cent slump.

According to Africa: The Big Deal, as 2022 closes, Kenyan startups have raised nearly Ksh.123 billion ($1 billion), a remarkable feat for a year characterised by funding constraints all around the continent, which has in turn led to closures and lay-offs.

Below are some of the biggest gainers in the Kenyan startup scene this year:

Retail and distribution firm MarketForce raked in $40 million (Ksh.4.5 billion) in February from a Series A round to introduce credit services and expand across Africa.

With operations in Kenya, Nigeria, Uganda, Tanzania and Rwanda, MarketForce was founded by Tesh Mbaabu and Mesongo Sibuti in 2018.

The venture enables informal merchants to source goods directly from manufacturers and distributors as well as placing and paying for orders digitally through its RejaReja app.

The round, which the company touted as the largest Series A round in East and Central Africa, came just 7 months after the firm concluded a $2 million (Ksh.227 million) pre-Series A round.

Agri-tech startup Apollo Agriculture in March raised ($40 million) Ksh.4.5 billion in equity funding from a Series B round.

Co-founded by Eli Pollak, Benjamin Njenga and Earl St Sauver, Apollo was launched in 2017 and builds credit profiles for small-scale farmers using machine learning models. The company verifies the identity of farmers and takes satellite coordinates of their fields.

The startup then uses the data to build automated digital processes for each step in a farmer’s life cycle, from customer acquisition through training to collect the payment.

In January, Poa Internet secured $28 million (Ksh.3.178 billion) to grow its reach across the country and the continent at large.

The company, founded Mike Puchol, Andy Halsall, Chris Rhodes, and DJ Koeman had won an innovation challenge hosted by Africa50, an infrastructure financier backed by the Africa Development Bank (AfDB) Group, in 2020.

4.    Lipa Later - Ksh1.36 billion

Tech credit platform Lipa Later in January raked in Ksh1.36 billion ($12 million) from a pre-Series A funding. 

The Buy Now Pay Later (BNPL) service partners with retailers to allow shoppers to pay in instalments and operates in Kenya, Uganda and Rwanda and it said the capital would enable it to enter Tanzania, Ghana and Nigeria.

Later this year, the company acquired the troubled e-commerce platform Sky Garden for an undisclosed amount.

5.    BasiGo – Ksh.1.3 billion

In February, Electric Vehicle (EV) startup BasiGo raised Ksh.489 million ($4300000) in seed capital, just three months after its launch.

The money was inclusive of Ksh.106 million ($930,000) raised last year in a pre-seed round.

BasiGo said the new funding will go towards building an electric buses assembly plant in Nairobi in addition to its current charging and servicing depot.

And in November, the startup secured Ksh.804 million ($6.6 million) from Mobility54, a venture capital (VC) arm of Toyota Tsusho, to enable the company to begin the commercial delivery of locally manufactured electric buses and charging infrastructure.

iProcure, a Kenyan agritech startup, closed a Ksh.1.2 billion ($10.2 million) Series B round in August.

The startup seeks to revolutionise traditional agricultural supply chains by developing its own distribution infrastructure which connects major agricultural input suppliers directly to local agro-dealers.

The B2B agritech was co-founded by Stefano Carcoforo, Nicole Galletta, Patrick Wanjohi and Bernard Maingi in 2014.

Turaco, an insurtech startup, raised Ksh.1.2 billion ($10 million) funding in a Series A round in September to grow its strategic partnerships towards mass market insurance adoption on the continent.

The startup, which uses both B2B and B2B2C approaches to drive insurance take-up across Kenya, Uganda and Nigeria, was founded in 2019 by Ted Pantone and Peter Gross.

Turaco creates customised life, asset, and vehicle insurance packages through partnerships with top tech-enabled companies with a large pool of customers or staff in emerging markets, acting as a distributor, broker, and key customer interface between the underwriter and the end consumer.

E-commerce platform Kapu was launched this month by former Jumia Group Executive Vice President Sama Chappatte after raising Ksh.980 million ($8 million) in seed funding.

Kapu specialises in the sale of groceries. With local agents around city estates, it will be sourcing its fresh produce and packaged consumer goods directly from manufacturers and producers.

Tech-enabled logistics start-up Amitruck in February secured Ksh.454 million ($4,000,000) in seed funding to enter the Tanzanian and Ugandan markets.

Founded by Mark Mwangi in 2019, Amitruck links shippers with transporters operating trucks, vans, tuk-tuks, pick-ups and motorbikes, allowing them to negotiate the transport charges and do away with the middleman.

The company has however since left the Tanzanian and Ugandan markets due to operational challenges.

Lami Technologies, an insurtech firm which uses a B2B2C approach to facilitate the distribution of insurance, raised Ksh.404 million seed extension in August to expand across Africa.

Lami was founded by Jihan Abass and uses an API to enable businesses like banks, start-ups and organisations to offer digital insurance products to their users. The product can also be used by partner businesses to manage their own insurance needs.

Other Kenyan startups which had a good year are supply chain and logistics SaaS provider Leta, which closed a Ksh.367 million ($3 million) pre-seed round in November; fast-moving consumer goods start-up Tushop which raised Ksh.345 million ($3 million) in a pre-seed round in April; and Credrails, a fintech which in February closed a Ksh.285 million ($2.5 million) seed round.

Bitcoin mining startup Gridless also received a $2 million (Ksh.245.6 million) investment from Twitter founder Jack Dorsey when he visited the country this month, while Duhqa secured Ksh.236 million ($2 million) in July.

Digital healthcare provider Zuri Health closed a Ksh.131 million ($1.3 million) pre-seed round in May, skincare firm Uncover raised Ksh.122 million ($1 million) this month, while Jumba raised $1 million (Ksh.117 million) in a pre-seed round.