Africa’s Strongest VC Market: Kenya Surpasses 2021 Figures
Last year, the global venture capital (VC) market experienced a slowdown. However, one African country stood out from the rest – Kenya. Despite the challenges faced by the continent and globally, Kenya recorded the strongest growth in funding raised. The country surpassed its 2021 figures, with reports showing that the deal count and value rose significantly.
Kenya Raises $1.1 Billion, Doubling 2021 Figures
According to data from market intelligence firm Briter Bridges and The Big Deal, Kenya raised $1.1 billion in VC funding last year. This amount is more than double what the country received in 2021, when the continent as a whole raised about $5 billion. Another report by Partech also shows that Kenya’s funding spiked by 33% last year, reaching a record $758 million.
Kenya’s VC Market Grows Despite Global Slowdown
The reports highlight Kenya’s strong performance in the VC market, with the country ranking fourth among the top VC destinations after Nigeria, South Africa, and Egypt. These four markets account for over 70% of the total VC funding in Africa. Briter Bridges ranked Kenya second in VC destination after Nigeria, which took the lead despite a drop in deal number and value.
Nigeria’s Funding Drops by Over 36%
When compared to the previous year, Nigeria saw a significant decline in invested amount. Partech put the figure at over 36%, while Big Deal reported a 20% decrease. South Africa’s funding stagnated as per Partech, while Big Deal data shows a 42% decline.
Africa Experiences Increase in VC Funding
Overall, Africa reported an increase in invested amount last year. Partech put the figure at $6.4 billion, Briter Bridges at $5.4 billion, and Big Deal at $4.8 billion. Kenya’s strong growth was not isolated to just one sector; however, clean tech and e-commerce emerged as the top performers.
Clean Tech and E-commerce Dominate VC Activity
The clean tech sector received the greatest VC interest in Kenya, accounting for nearly half of the total capital raised by Kenyan private venture-backed companies. This is buoyed by Sun King’s mega round and M-Kopa’s funding. Both PAY-Go scale-ups are providers of solar home systems, but M-Kopa’s platform now includes financing of a range of products and services.
Clean Tech Ventures Attract VC Backing
Other clean tech ventures that attracted venture backing include BasiGo, an EV startup trying to electrify Kenya’s public transportation. The sector is expected to continue growing as investors focus on sustainable energy solutions.
E-commerce Emerges as Key Sector
E-commerce also emerged as a key sector in Kenya’s VC market. With the rise of online shopping and digital payments, e-commerce companies are attracting significant investment. This trend is expected to continue, with more startups entering the space.
Kenya’s Strong Performance Reflects its Growing Economy
Kenya’s strong performance in the VC market reflects the country’s growing economy. The government’s efforts to promote innovation and entrepreneurship have paid off, with a growing number of startups attracting investment.
Conclusion
Despite the global VC slowdown, Kenya stands out as a beacon of hope for African startups. With a growing economy and a strong VC market, the country is well-positioned to attract more investment in the future.
Sources:
- Briter Bridges
- The Big Deal
- Partech
Related Articles:
- "Africa’s Strongest VC Market: Nigeria Takes the Lead"
- "Kenya’s E-commerce Sector Booms with Increased Investment"
- "Clean Tech Emerges as Key Sector in Kenya’s VC Market"
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