Walking the startups journey in Kenya: Documentation of successes and pitfalls between 2010-2020

Abstract

Kenya’s Startup ecosystem has experienced tremendous growth over the last ten years. Further, Kenya’s startups have also been among the top-funded in the continent during the same period – attracting financing of between USD 300 million – over USD 3 billion. However, there is currently a lack of granular data guiding policies on the startup ecosystem in Kenya. Hence this Paper traces startup successes and pitfalls of the Ten years (2010-2020) Period in Kenya. The study utilized cross-sectional and longitudinal research designs. The target population was start-ups registered in the 47 Counties in Kenya. A total of 104 startups participated in the study. A mix of sampling techniques was used, namely cluster-stage, systematic, purposive, and snow-balling sampling techniques, to select the respondents for the study. Data were analyzed using Content analysis descriptive statistics were used for data analysis. The findings indicated that startup innovation hubs emerged in Nairobi in 2010 but offer time, which spurred the mushrooming of startups, seats, and co-working spaces with decentralization to significant towns in the country. The Kenyan startup ecosystem has experienced tremendous growth for the last two decades, growing from 10% in the 2000-2010 to 80% in 2010-2020. However, access to financing remains the biggest challenge for startups because of the risk associated with it, especially for early-stage startups. To strengthen the growth of the startup ecosystem, the government, through the statement of Kenya National Innovation Agency, should ensure the development of policies tailored towards startups. The national government should provide matching funds and establish an Inter-county collaboration framework to ensure skills transfer within and among the counties.

Keywords: {'name': 'Entrepreneurship, FCDO, Startups Ecosystem, MSMEs, Kenya'}

Authors & affiliations

Stephen Muathe
Affiliation not supplied

Paul Sang
Affiliation not supplied

Lucy Kavinda
Affiliation not supplied

Sammy Letema
Affiliation not supplied

Samuel Maina
Affiliation not supplied

Kenneth Chelule
Affiliation not supplied

Deposited references

Supplied references, not a list of publications citing this article.

DOI: 10.2307/41165799

DOI: 10.1057/978-1-137-57878-5_8

Giuliani, D., & Murima, J. H. (2020). Briter Bridges Africa’s Investment Report 2020. Funding activity across the continent’s tech and innovative scene.

GRID-Arendal (2021). Circular Economy on the African Continent: Perspectives and Potential. 48 pages. Arendal, Norway: GRID-Arendal.

Gugu, S., (2018). VC4A Venture Finance in Africa research: A maturing Startup ecosystem

Isenberg, D. (2011). The entrepreneurship ecosystem strategy as a new paradigm for economic policy: Principles for cultivating entrepreneurship. The Babson Entrepreneurship Ecosystem Project. Wellesley College.

DOI: 10.20525/ijrbs.v11i4.1782

Lawyers Hub, (2020). Policy Priorities for Startups in Kenya; a report by the Lawyers Hub in partnership with the National Assembly Office of the Leader of Majority and The Kenya National Innovation Agency (KENIA).

DOI: 10.1515/erj-2016-0011

Motoyama, Y., Henderson, C., Gladen, P., Fetsch, E. & Davis, S. (2017). A New Frontier: Entrepreneurial Ecosystems in Bozeman and Missoula,

DOI: 10.46281/aijssr.v11i1.1688

DOI: 10.12691/jbms-10-3-5

Muathe, S.M.A. (2010). The Determinants of Adoption of Information and Communication Technology by Small and Medium Enterprises within the Health Sector in Nairobi, Kenya. Unpublished PhD Thesis, Kenyatta University

National Commission for Science, Technology and Innovation (2022). Kenya among Top 5 African Countries with the most Developed Startup Ecosystems

DOI: 10.1057/978-1-137-57878-5

DOI: 10.1111/j.1540-627X.2004.00105.x

DOI: 10.23962/10539/30359

DOI: 10.1108/JEEE-02-2021-0079

Republic of Kenya. (2012). Micro and Small Enterprises Act, No. 55 of 2012. https://www.in-dustrialization.go.ke/index.php/policies/99-micro-and-small-enterprises-act-2012

Robehmed, N. (2013, December 16). What is a startup? Forbes, https://www.forbes.com/sites/natalierobehmed/2013/12/16/what-is-a-startup/#3d176f424c63

Saunders, M., Lewis, P. & Thornhill, A. (2009). Research Methods for Business Students. Pearson, New York.

Silvana & Associates (2021). Start-ups Requirements and Challenges

DOI: 10.1111/etap.12167

Wickham, P. (2004). Strategic Entrepreneurship, 3rd ed. FT Prentice Hall, London.

DOI: 10.3390/joitmc8010035