In the last two years, the Kenyan tech startup scene has faced some serious challenges.
At least eight homegrown startups have shut down, casting a shadow over Kenya’s dreams of becoming Africa’s ICT hub.
The numbers are striking: these startups collectively soaked up a whopping Sh11.2 billion in investment.
But it’s not just about the money; there are deeper issues at play.
One of the most prominent casualties is Twiga Foods, an agri-tech company that raised an astonishing Sh23.4 billion in venture capital.
Despite this, they recently announced layoffs and a 40% cost-cutting strategy, blaming a “funding drought.”
But is it all about funding?
Not quite. Many startups seem to struggle due to issues with their business models and a lack of uniqueness in solving real-world problems.
President William Ruto’s vision of Silicon Savannah is facing a reality check.
Some other notable casualties include Sendy, Gearbox, Zumi, SkyGarden, Notify Logistics, Kune, BRCK and WeFarm.
Sendy, for instance, raised Sh3.9 billion but still had to close down its retail platform and lay off 20% of its workforce.
Gearbox, an engineering technology firm, also downsized, despite having raised Sh730.5 million over nine years.
Zumi, an e-commerce platform, joined the list of casualties, announcing its closure due to a lack of funds, despite raising Sh146.1 million since its inception in 2016.
Last year, five more startups exited the Kenyan market, adding to the concerns.
SkyGarden, despite raising Sh1 billion, couldn’t sustain its operations and had to bow out of the market.
Notify Logistics, after raising Sh45 million, encountered difficulties in the market.
Kune, despite raising Sh146.1 million, had to close down its operations.
BRCK, having raised Sh613.6 million, faced challenges that led to its exit from the market.
WeFarm, despite an impressive Sh4.7 billion in funding, eventually had to close down.
The trend is clear: big funding doesn’t guarantee success if the core idea isn’t strong.
Many entrepreneurs are chasing valuations and buyouts instead of solving tangible problems.
The viability of business models and the ability to provide unique solutions to real-world problems play a pivotal role.
It’s a challenging time for Kenya’s tech scene, but there’s hope that with the right strategies and a focus on solving real problems, the Silicon Savannah dream can still be realized.