Annual funding for Kenyan start-ups could hit Sh100 billion three years despite lack of state funding, a technology conference in Nairobi was told on Wednesday.
According to digital agency Go Gaga Experiential, start-ups dealing in payments and remittances will attract the highest amount of investments due to the growing investor interest in the sector.
Speaking at the opening ceremony of Digital and Technology Week in Nairobi, Go Gaga Experiential, CEO Norah Mumo said Kenyan Startups raised Sh48 billion venture funding in the first quarter of 2022.
This is Sh7 billion more compared to Sh41 billion raised in the whole of 2021.
"The payment and remittances sector addresses a huge fundamental issue of how to pay and get paid affordably,"she said.
Mumo said investors like spaces that have proven value and have already attracted big investors
Kenya is now among the Big 4 countries in Africa attracting massive funding with Nigeria leading the way with Sh60 billion annually.
The country has been ranked high in terms of growing number of engaging international investors, huge population with access to technology, and a growing number of startup support organisations active in the ecosystem.
Over 80 per cent of annual jobs created come from small and medium enterprises sector which also contributes up to 33.3 per cent of GDP.
In 2021, the sector created 14.5 million jobs despite the global Covid-19, according to the Micro and Small Enterprises Authority (MSEA).
At least 15.1 million jobs had been created in 2020.
According to the Kenya National Bureau of Statistics (KNBS), about 400,000 micro, small and medium enterprises have been dying within the first year of inception, in the last five years, raising concern over sustainability of this critical sector.
Latest report by the Micro and Small Enterprises Authority (MSEA) shows majority of small businesses are yet to benefit from state-backed bailouts and funding under the credit guarantee scheme.
In September 2020, the government established a Credit Guarantee Scheme for Micro, Small and Medium Enterprises, as part of its interventions to cushion them from the effects of the Covid-19 pandemic, monies MSEA says has not benefited the targeted groups.
Prolonged business shutdowns, depressed demand, and value chain disruptions created considerable operational and financial pressures on SMEs, threatening the survival of many viable enterprises and entrepreneurs.
