Kenyan investors are being urged to invest in local startup ecosystem in order to build and scale up technologies suited to solve local challenges.
Online marketplace Airduka chief executive officer Abdul Varvany has said the investment scene in the country is yet to catch up with the tech industry, which has grown to be named Africa’s Silicon Savannah.
Varvany said the lack of support from local investors had forced startups to look for foreign investors, who are usually keen on funding tech’s next big thing.
“Every business idea needs support, especially in the early stages. However, local investors, who matter, especially at those stages, show little interest in supporting startups,” said Varvany.
He has further urged investors in the country to have faith in Kenya’s upcoming businesses, especially those in tech.
“Local investors remain critical for tech startups that are yet to become established. It is their Ksh 1 million or Ksh 2 million investments that help upcoming businesses kick-start operations,” he added.
He said lack of financial backing is a major reason most startups shut down in early stages.
AirDuka is a Kenyan online marketplace startup that connects sellers and buyers.
His sentiments coincide with the recent launch of a report by Endeavour Nigeria which found that the continent’s digital space is increasingly putting Africa on the map. The report found that global investors, partners and renowned entrepreneurs are paying close attention and increasingly interacting with African startups.
Dubbed Inflection Point June 2022, the report states that Africa is the next growth frontier in the digital space, with a digital economy valued at $115 billion and expected to grow to $712 billion by 2050.
The report further noted that the digital opportunity is concentrated in four countries: Kenya, South Africa, Nigeria and Egypt.
The growth in the four countries is driven by the interplay of factors such as growing economies, a young digitally savvy population and increasing digital penetration.
A separate report by Google found that African startups raised over $4 billion in 2021, 2.5 times more than in 2020, with fintech startups making up over half of this funding.