Kenya has been named among the top five start-up hubs to watch beyond Silicon Valley.
According to a post by World Economic Forum, Kenya was named alongside Singapore, the Republic of Korea, Brazil, and Israel as countries that have become innovation hotspots and are attracting entrepreneurs and start-ups, with a specific look at how each government has developed policies to support the ecosystem within their nation.
This comes at a time when Kenya’s Senate in September proposed the Start-up Bill 2020, that is sure to stimulate the interest of Kenyan entrepreneurs and investors who have an eye on this region.
The Bill seeks to govern the interactions between the government, incubators, start-ups, and investors; to foster a culture of innovation and entrepreneurship; and crucially, link start-ups with public and private investment, and research and development institutions.
The start-up scene in Africa has been increasingly dynamic over recent years. Total investment in start-ups on the continent passed the $2 billion mark in 2019. A growing population coupled with increasing adoption of mobile devices has enabled numerous digital start-ups to thrive – and Kenya lies at the heart of Africa’s start-up success story.
The post attributed the startup growth in Kenya to Reliable internet, as well as an excellent online payment infrastructure – centered around the M-PESA service offered by Safaricom – is enabling many mobile-based business models to thrive. In addition, the government supports entrepreneurs in growing and scaling their ideas through its Enterprise Kenya initiative.
“ Kenya is deemed to be one of the more attractive emerging markets for early 5G deployment, and the government also has ambitious plans to create a so-called Silicon Savannah, which it hopes will generate 2% of GDP within a decade. There is, however, some room for improvement; Kenya’s labour laws are not always well-suited to serving start-ups, and there is a lack of start-up-specific policies around founding and funding,” read the post.
According to a 2019 report by Partech on Africa’s tech start-up sector, Kenya is ranked second in Africa both in the total amount of funding received by start-ups as well as the number of deals.
All showed significant increases over 2018, with a total of $564 million in funding – a rise of 62% on the previous year – spread over 52 deals (a rise of 18% on 2018). Industries such as fintech, off-grid technologies and enterprise are the top sectors with commerce, healthcare and the connectivity sector following close behind.