As soon as you land in the airport at Nairobi, you can see in the halls of the terminal big painted advertising for Mpesa, the mobile money which made the success and reputation of Kenya as one of tech hub of Africa (the others would be Nigeria, South Africa and Ghana if you ask).
What’s fascinating in Nairobi is how the startup scene all began, with two different and simultaneous tectonic moves who happened at the turn of year 2010.
The first big thing is of course Mpesa. This mobile money system, designed by dominant telecom operator Safaricom, has been launched in 2007, but really gained traction in 2009-2010 after a LOT of test and try, fall and get up again, and an amazing UX skill from a telco. Today, more than half Kenya’s GDP is in mobile money.
The second move is the presidential crisis of 2009, which triggered the creation of Ushahidi, a crowdsourced map used for emergency notifications designed by the team of Erik Hersman, better known as “White African” online and one of the top thought leader and doer of tech in the continent. Its team has, like the Paypal mafia in the US, been a fertile ground for a lot of other tech initiatives afterwards, including iHub, the top tech community, building and coworking space in Nairobi.
The Mpesa ecosystem is really fascinating. As it allows anyone, including the many unbanked people, to be included in the loop of the formal economy, many apps have plugged onto it, from bitcoin/remittances startups to connected agriculture insurance Kilimo Salama.
We were in Nairobi for the Afrikoin conference on digital & cryptocurrencies back in 2013, and will be there again in 2015.
PROS
- Hub of a 150 million people region (Tanzania, Uganda, Rwanda, Burundi and Kenya) with forthcoming monetary union
- English-speaking (mother tongue)
- Diversified economy = many innovation possibilities in different industries
- Cooperative/ Sharing economy accounts for 42% of GDP (chama): highly social base
- Diaspora effect: $1bn remittances in 2013
- Supportive government: KONZA city+ 30% tenders allowed to youth/ women entrepreneurs
CONS
- Security issues (Somali and South Soudan nearby) and recent Westgate terrorist attack
- Success in Kenya/ East Africa does not mean success in other parts of Africa (cultural differences)
- Lack of technical skills/ talent
- Market size not so big+ many cultural differences inside Kenya (biggest ethnic group only 20% of population)
TOP STARTUPS IN KENYA
Ushahidi is a non-profit software company that develops free and open-source software (LGPL)
M-Pesa is becoming a staple in transaction payments across Kenya and is an integral part of many East African nation’s startups
Rupu Kenya is a daily deals and discounts website that provides online marketing resources for small and large businesses
Angani is a Kenyan public cloud computing provider offering services to the entire East African region
Able Wireless is an on-demand Wireless Streaming Service Provider. It is termed as the “Netflix of Africa”
SleepOut Kenya is an e-commerce booking service that assists travellers in obtaining discounted rates for accommodation overseas
TOP PEOPLE TO KNOW IN KENYA
Erik Hersman
CEO
BRCK
Technologist and blogger, founder of BRCK, Ushahidi and iHub Nairobi. Also known as “White African” online
Mbwana Alliy
Founder
Savannah Fund
Founder of the Savannah Fund, Kenya’s VC. Tanzanian national with Stanford education and Silicon Valley experience
Martin Obuya
Founder and Chairman
LiJoMe Group Inc.
IBM-Trained Systems Engineer with over two decades experience in System Development, Corporate Planning & Project Management
Brian Muthiora
MMU Regulatory Expert
GSMA
Provides support to mobile network operators to address regulatory barriers and contributes to their regulatory engagements
Pelle Braendgaard
Co-Founder
Kipochi Ltd.
Danish and American codeur turned entrepreneur with Kipochi. Ties up Bitcoin to remittances with strong vision on crypto-currencies
Eran Feinstein
CEO
3GDirectPay
Veteran of the mobile payment industry in Africa, heading 3GDirectPay
KENYA
| GDP (in billions USD): | 56 |
| GDP per capita (in USD): | 1,269 |
| Population: | 45,010,056 |
| Population in 2050 (est.): | 70,755,456 |
| Internet Penetration: | 47.3 % |
| Mobile Penetration: | 67 % |
| Banking Penetration: | 62 % |
| Credit Card Penetration: | 22 % |
LINKS & RESOURCES
- Entering Kenya’s mobile market
- Kenya connectors & events of 2014
- How we can build Kenyan entrepreneurship
- The top 4 Kenyan Startups to look out for
- Starting a Business in Kenya: Market Analysis
- BRICS series #5: Remitix, a South African solution for cheaper remittances
- A brief overview of Kenyan startups
- A demo day in Nairobi, Kenya: local innovation rules
- Kenya startup ecosystem: welcome to the land of mobile money
- Kenya’s lesson on innovation to Africa – From hack schools to long-term capability building
- Real-time stock price for African farmers: a case study of connected agriculture with M-Farm in Kenya
- A exploration of startups and innovation in Kenya with Mbwana Alliy
- What MPesa has done right and where it is headed