Last month, a furor broke out on Kenyan social media when a French startup founder, who had only spent a few months in the East African country, seemingly had no trouble raising $1 million in pre-seed funding for his new food delivery app. Meanwhile, local and regional founders say they still have difficulty pulling together capital after years of attempts.
While talking to a Kenyan tech founder about this last week, I was reminded of a line from Ngũgĩ wa Thiong’o’s memoir, Dreams in a Time of War: “Belief in yourself is more important than endless worries of what others think of you.” Ngũgĩ was recalling a moment of realization from his childhood in colonial-era Kenya, but the quote feels apt today.
In the early 2010s, Kenya’s fledgling tech ecosystem was used as a shorthand for a wider “Africa Rising” narrative. It was promptly dubbed “Silicon Savannah” as startups sprouted and tech talent flocked to Nairobi.
But by 2016, there were mutterings in local circles about how the funding seemed to be disproportionately favoring North American and European founders who were launching companies in the country. Things came to a head in 2017, when a Village Capital report titled “Breaking the Pattern” appeared to confirm what many local founders and journalists had been saying: In East Africa, 90% of disclosed startup investments in 2015 and 2016 went to companies with one or more European or North American founders. It’s an issue that hasn’t gone away in the last five years, Adedana Ashebir, regional director for Africa and the Middle East for Village Capital, told me.
I remember one founder was telling me of how they were cheated out of their company by mzungu, but the problem is that the funding comes from the west, and they insist on having someone they can trust or know on the team.
This also happens in the ngo world, donors will not just release their cash without having their own high up in the team, and personally I think it makes sense - I would not put my money in a project if I dont have some control, especially when it comes to big money.
The second largest slum in the whole world is also in our capital city, and we somehow seem to be proud of that, marketing it to foreigners.
It’s all about the perception we create.
We are seen as very incompetent people based on the state of affairs.
We can only have our own invest in us, and regulate external investors to balance the market, and not have all the money flowing out.
tuseme ukweli, Africans steal investor money. I’ve seen it with my own eyes and we see it every day in the papers with the public sector. Ata mimi ningekuwa investor wa majuu I’d rather give money to a mzungu ndio mpelekane korti za majuu. Mwafrika once amekuibia 10m+ hakuna mahali utampeleka.
Theft is not the main issue. Main issue is the lack of local capital investments.
Remember that money only follows money. If ultra high networth kenyans and kenyans in the diaspora were investing in local companies, white capital would trickle down.
This has been the case in Nigeria. Every startup founder in Nigeria is an investor in another startup. Hapa Kenya even successful founders do not angel invest in other startups.
Let me provide some examples of angel investors in Nigeria who are investing their own capital in Nigeria
Abdul Hassan in Nigeria is a startup founder whose own startup, Mono.io has received $2m usd in funding. On the side he has invested in 17 other Nigerian startups with small checks in his personal capacity. Here is the full list of his investments: https://abdulventures.com/
Olumide Soyombo has invested in 33 Nigerian startups. Here is his portfolio: Here is his portfolio. Note that one of his first investments was in Abdul’s Mono and Abdul is now paying it forward and has written small checks for 17 new startups in less than 3 yrs
Adetunji Eleso has invested in 9 startups. 2 of them; Delivery Science and Lifebank have become quite popula
Iyinoluwa Aboyeji has invested in 47 startups.
There are way more examples than I can write about. I have not even included the likes of GB, Otunba Sho who are Nigeria’s tech ecosytem’s largest investors. On Adbul’s website, his pitch is: “I will help you with product and marketpositioning if that’s what you’re currently struggling with, and also introduce you to my network of HNIs and VCs that can invest up to $250k.”
Every Nigeria startup founder who makes some money is always investing in other Nigerian startups then introducing other startups to larger investors who invested in their company.
Meshack Alloys, is a Kenyan CEO and founder of Sendy. This year alone they have received $20m in funding. This is 10x more than Abdul in Nigeria.
Africa’s Talking in Kenya has received over $10m in funding and has only black founders. Which local startup do you know they have invested in?
Cellulant is black owned and a large Kenyan ‘startup’ led by Macharia. Raised $47m usd and are raising another $150m usd in 2022. Zero angel investments in other Kenyan startups.
Let us face it. Kenyans wakona uchoyo and very cliquey. There are a few people at the top and they always want to be admired. Sort of how in primary school you may not want to teach someone something ndio asikushinde.
Just 7yrs ago, Kenya was above Egypt and Nigeria in angel investments. IHub was the biggest startup incubator in Africa and Nigeria’s CCHUB was very small. CCHUB was located in a very dingy office in Yaba(an Embakasi like neighbourhood) while iHub was located in Kilimani at Bishop Magua spanning 3 floors with incredible interior design with even a fancy coffee place in the space to boot. CCHub bought iHub in 2019.
This is the sad tale of our ecosystem.
There is no problem with white people or sijui white money. The main issue is that the 3Fs((family, friends and fools) in Kenya are not writing small 500k checks to fellow Kenyans.