Due to their ability to scale, create new opportunities, and accelerate wealth creation, innovative start-ups are integral to the future growth of the Kenyan and the wider African economy. Innovative and well supported ecosystems are economic engines that drive the development of new ideas and the scaling up of existing innovations that have great potential.
Indeed, tech-ecosystems serve as a platform for organisations to interact with global stakeholders, which supports goal number 17 of the Sustainable Development Goals (SDGs). It states: "Strengthen the means of implementation and revitalise global partnerships to enhance sustainable development."
This recognises the value of multi-stakeholder partnerships in mobilising and sharing knowledge, expertise, technologies, and financial resources to achieve the SDGs.
StartupBlink Ecosystems Index Report 2021, a global map of start-ups, co-working spaces, and accelerators, ranked Kenya as the 61st best tech-ecosystem globally, top in Eastern Africa, and second overall in Africa.
There are numerous incubator and accelerator programs in Kenya designed to support young entrepreneurs involved in the tech-space. These incubators and accelerators work with start-ups or entrepreneurs for a fixed period of time and provide them with intensive mentoring and development services.
Kenya’s ranking in the StartupBlink Ecosystems Index Report 2021, particularly in relation to its regional peers, underscores its thriving start-up ecosystem, which has greatly benefited from rapid technological advancements in the country.
To establish a successful start-up in a competitive market, one must understand the different growth phases in business and tap into optimal opportunities with reference to the business’ growth strategy. Pre-seed stage, for instance, targets upcoming start-ups seeking funds for their first round of operations. As the business is still in its infancy, funds can be raised from friends, family, or angel investors. At the seed stage (break-even), a start-up has built enough traction to attract institutional investors, who help it expand into new markets or develop new products.
There is no set recipe for setting up a successful start-up. However, local ecosystems require key ingredients such as the availability of incubators and accelerators which provide mentorship, guidance, funding and partnerships to aid fledgling start-ups succeed. Start-ups that haven't cemented their presence in their markets can benefit greatly from an accelerator's resources and network.
Start-up funding across Africa has grown by at least 600% since 2017. It is rare for start-ups to survive in the long term without the support of an investor or financial institution thereby evidencing the importance of access to finance. Reliance on various funding sources, such as angel investors, venture capitalists, crowdfunding platforms, private equity firms, and other providers provides a base through which start-ups may receive financing to support their short to medium term operations.
Ensuring the success of fledging start-ups necessitates the creation of platforms through which entrepreneurs tap into supportive networks where they can exchange feedback, innovative ideas, resources and contacts, access funding, become leaders and pursue collaboration.
Karen Kandie
