Kenya’s startup ecosystem has shown impressive growth over the years, obtaining both 2.1 points in the StartupBlink ecosystem index and ranking as the third-leading African country for startups after South Africa and Nigeria. These achievements have coincided with significant investment flows into areas such as Nairobi, with efforts now underway to uplift other areas like Mombasa, to further capacitate the Kenyan investment pipeline.
According to the StartupBlink Global Startup Ecosystem Index 2022 report, the Startup Ecosystem of Mombasa is ranked at number 891 globally and shows a negative momentum, decreasing by 135 spots since 2021. This comes as Kenyan startups raised nearly one billion dollars in the first half of 2022, surpassing what the country secured last year. Yet, while East Africa’s “silicon savannah” may be breaking boundaries, the country’s economic focus on the capital city means that peripheral areas potentially receive only a fraction of the funding.
To counteract Mombasa’s downward trend and support increased capital inflows to the region’s secondary cities, Innovate UK KTN’s Global Alliance Africa project recently collaborated with the Association of Startup and SMEs Enablers of Kenya (ASSEK) and the Association of Countrywide Innovation Hubs, to train innovation hubs on KTN’s Innovation Canvas. The Canvas is designed to help entrepreneurs create value from innovation and identify the changes needed to make their ideas succeed.
Global Alliance Africa’s Country Lead for Kenya, Sheilah Birgen, says: “Our aim for this training was to build the understanding of the investment pipeline for entrepreneurship initiatives, as well as their capacity, so that they are able to help scale entrepreneurs. This will also come from some of the key requirements from the investors”.
Birgen adds that the Innovation Canvas essentially allows initiatives to look at the business holistically and provides a framework for assessing the strengths and weaknesses of a specific project. In doing so, users can identify the most urgent challenges to overcome, and prioritize what action to take. Seven innovation hubs took part – in this initial pilot programme, representing a combination of privately-owned and university-back organisations.
Speaking on behalf of ASSEK, Mercy Kimalat notes that: “While the majority of our members are based in Nairobi, we have a nationwide mandate. This collaboration allows us to work with both university-focused and privately-owned hubs that work directly with growth-stage entrepreneurs and assist them with the tools they require. Universities are known for their excellent tools of knowledge for entrepreneurs and quite a number of them, including Dedan Kimathi University Hub, have shown an interest in investments for entrepreneurs. So, in a way, we are providing universities with a tool that will aid them in structuring milestone funding for their entrepreneurs.”
In Kenya, the majority of investments are directed to companies in the capital city – Nairobi, with only a handful of investors actively looking for entrepreneurs in areas such as Lodwar, Garissa, and other northern parts of the country. Trainings such as the Innovation Canvas training indicate that the capacity of the entrepreneurial support organisations in these regions is being amplified.
Robert Karanja, Chairman for the Association of Countrywide Innovation Hubs, says: “We want to show investors that there is innovation and opportunities beyond the capital city. There are quite a number of underrated innovations in secondary cities that, given the opportunity, they are also capable of contributing to the improvement of Kenya.”
Kimalat concludes, saying: “Entrepreneurs are everywhere, it’s just that sometimes they lack resources and knowledge that will build their capacity in order for them to be recognised. So, this partnership is the first of many that will help scale entrepreneurs in remote or secondary areas and prepare them for investments.
This training is a first step to creating a localised resource for entrepreneurs, both at the county and national levels, to ensure that Kenya becomes a hub for innovation and ensuring that the investment pipeline is strengthened.