Fintech ventures more common in Kenya, but e-commerce better funded

Home » Blog » Fintech ventures more common in Kenya, but e-commerce better funded

Fintech startups account for almost one-third of Kenya’s tech startup ecosystem, but e-commerce and retail-tech companies attract by far the most funding, at least of late.

That is according to the Kenyan Startup Ecosystem Report 2022, released by startup-focused news and research company Disrupt Africa last week.

Since launching its research arm in 2016, Disrupt Africa has built up a significant portfolio of publications, most notably the African Tech Startups Funding Report and Finnovating for Africa, available free for all via open-sourcing initiatives with various partners across the continent’s tech ecosystem.

The Kenyan Startup Ecosystem Report 2022, its 19th publication and fourth country-focused report, has been released in partnership with Quona Capital, NEAR Kenya, MarketForce, Newtown Partners, Enza Capital, Cellulant, and AAIC Investment, and is also available for free.

It finds that fintech is the leading sub-sector of the Kenyan startup space in terms of levels of activity, with 93 of the startups tracked (30.2%) being fintech ventures, almost three times more than the next biggest sectors – e-health and agri-tech.  

This trend is not unusual, in fact fintech takes the top spot in most African countries as it solves fundamental problems for the populace, is an area in which novel tech solutions tend to be well received and quickly adopted, as well as offering attractive returns for investors.

The most popular areas of focus for Kenyan fintech startups are the payments and remittances space (24 ventures; 25.8 per cent of fintech companies) and the lending and financing space (21 startups; 22.6%). This, again, is no surprise, as these areas cover many of the most fundamental financial services that are still lacking for much of the population; and historically these categories have been the jumping off point for fintech ecosystems continent-wide.

In Kenya, the business administration space ranks third, with 17 companies making up 18.3 per cent of total active ventures; while in fourth place, insurtech accounts for 13 companies (14%). Kenya’s remaining startups are spread across the investtech, personal finance, blockchain, security and ID, open finance, and “other” categories.

Fintech may lead for activity, but not for funding

Over the almost eight years since Disrupt Africa started tracking funding data in Africa (2015-2022), Kenya has been the second most popular investment destination on the continent, after Nigeria. At least 242 Kenyan startups have secured funding, totalling at least US$1,281,918,200.

Whereas in other leading African startup ecosystems the fintech space is a clear favourite for investors, in Kenya investment flows a little more equally. While generally fintech accounts for the lion’s share of funded ventures, when it comes to total secured funding a handful of sectors have come out on top in the years since 2015. Agri-tech and energy have at various points been recipients of the most capital, generally dependent on whether it was Twiga Foods or M-KOPA Solar securing a bumper round that year, while in 2022 e-commerce and retail-tech has emerged as a dominant force.

In 2022, e-commerce and retail-tech has been dominant, with 14 startups securing a combined US$230,796,000. This amount accounts for just short of 20 per cent of all Kenyan startup funding, ever, with major rounds for Copia, MarketForce and Wasoko making up the majority of that.

The Kenyan Startup Ecosystem Report 2022 is available to all for free, making the data and analysis contained in its pages accessible to those for whom the information is most valuable – entrepreneurs.

The publication, which is the 19th released by Disrupt Research, provides a detailed overview of the Kenyan startup ecosystem and its development over the last 5-10 years. It involves analysis as to what areas startups are active in, a detailed look at funding and M&A trends, and details the range of startup support services available to Kenyan entrepreneurs, including hubs, incubators, accelerators, and government, corporate and university initiatives.

Source link




Scroll To Top

My Cart

Shopping cart is empty!

Continue Shopping