Funding for Kenyan startups dropped from $47.3 million in 2015 to $10.5 million in 2016.
After a decade of optimism, buzz around Kenya’s tech potential has waned, as many startups failed to become profitable or went bankrupt.
Optimism was fueled by successes like mobile-money service M-Pesa and crowdsourced reporting and mapping platform Ushahidi, both created in Kenya a decade ago.
There is less funding coming from agencies, foundations, and governments, and more from private investors, private equity funds, and tech-focused funds.
This could mean a reduced focus in social ventures, but also more pressure for startups to be more competitive and reach financial stability.
But the type of investor interested in Kenyan startups is changing, according to the Wall Street Journal, and that can help reverse the trend.
Last year, startups received less funding not only in Kenya, but across Africa. But this cash shortage might be exactly what Kenya’s tech scene needs to start growing again.
The fall in Kenya was the steepest compared to the continent’s other two major tech hubs—South Africa and Nigeria.