Kenya has been in the forefront of Internet Startups in Africa pioneered by the widely popular M-Pesa payment platform owned by Safaricom. However, things may be about to change drastically going by an article that first appeared in Reuters. The article suggest Venture Capital is looking to dump Kenyan based Startups for Nigeria because of their inability to generate profits. It claims “lack of talent, problems in attaining seed capital and ideas that cannot be sold to a mass market or easily monetized have so far held back hundreds of Kenyan start-ups”.
The article mentions 88mp an Africa based seed fund, which has seeded almost 20 companies in east Africa’s biggest economy, is taking a break from investing in Kenyan start-ups to focus on Nigeria where they believes the tech ecosystem is more profit-focused and there is less “fluff”. According to the Kenyan based director of the fund Nikolai Barnwell
“Many were drawn to the tech sector by the Kenyan government’s push for a “digital future”, plentiful Western donor funding and foreign media coverage about “Africa’s Silicon Savannah”.
From co-founders of Facebook to the biggest tech funds you can find in Silicon Valley, they’ve all been here to look and they have all gone home shaking their heads,”
This article in our opinion buttresses the need for Startups to engage in businesses or innovations that should cater for a critical mass, solve a major problem and still have a huge potential to generate revenues.
88MP also has on its board Chika Nwobi Co founder of M-Tech and founder of L5 Labs the incubator behinh Jobberman and Cheki,ng amongst others.
You can get the full Retuers article here