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My Take: Is Nairobi Becoming The Hottest City In Africa To Launch A Startup?


next-big-thing-signLaunching a startup is directly affected by the start-up ecosystem and there has been a vacuum on whom to learn from in Africa.

There’s no record of success or failures as even those who tried were doing it on their own. There are few exits recorded if they ever existed and it seems up and coming entrepreneurs have few local examples to learn from. However, things are changing fast.

Now & Here

Africa is working on the next big thing, and in which sector cities are booming with hubs, accelerators and there is an influx of investment funds and VC’s. There is also a growing tech community among the hubs with a focus on innovations and the customer. Everyday its becoming the NOW time and HERE place to launch a disruptive start-up. The entrepreneur atmosphere and culture is becoming the best for launching a successful startup’s each new day. The major countries in Africa with a higher growing number of internet users, higher internet accessibility are Kenya, Nigeria, South Africa, Ghana, Morocco and Egypt.

Nairobi, Kenya’s capital boosts of more than 8 million internet users, several co-working and incubation spaces such as iHub, Nailab, The GrowthHub and iLab and the 88mph Startup Garage. Several creative and art working spaces are springing up across the city. From hackathons to grants, then growing to seed funds such as 88mph and Village Venture Fund and venture capital such as Savannah Fund, the city is heading there. Entrepreneur social networks like VC4Africa, HumanIPO and AfroVumbua are also making dreams possible by exposing them to early stage funding oportunities.

Local Solutions, Global Attention

Nairobi has seen a number of startups launch and grow  and still growing such Kopokopo Inc, that got the attention of Google’s chairman Eric Schmidt while on his Africa tour.  Ghaflakenya, top local entertainment site, SasaAfrica, Africa’s craft market and top among the DEMO Africa top five 2012. Other successful names include Rupu, EatOut, and Cheki-independent success stories and not a result of hubs or accelerators, though they have gained from several available resources in the tech community.

The city also holds major tech events such as Mobile Web East Africa which concluded on 22nd February this year , the inaugural DEMO Africa and Pivot East,a local startups pitching event among others .

Big Players

The success story of Mpesa and crowd sourcing platform Ushahidi have positioned Nairobi to be the next silicon Savannah in Africa. The recent entry of Rocket Internet’s Jumia with Euros 20m funding and Hellofood are some others signs the city is getting attractive.

The brothers are set to stir the startup culture globally with their today’s launch of Global Fund, to fund start-ups across the world. Mostly leaning on eCommerce, fashion and mobile payments, the brothers sold their CityDeal startup:  Groupon clone to Groupon. They were responsible for the massive Groupon growth across Europe before they made a calculated exit at the IPO. The brothers have had successful exits to firms like eBay. The firm has built successful firms such as Wimdu, Paymill, Jumia, Hellofood, Lazmada  and many others.

With ventures in Brazil , Europe, Asia and across Africa,  entrepreneurs in Nairobi might learn a thing or two as the brothers have proved good in launching viable business with tried business models, great at execution and hiring top talent and also good at exits. The brothers have also inspired most of the eCommerce startups on the continent and most of them are either founded by former Rocket Internet partners or employees. May be Kaymu will be launched in Kenya after Nigeria.

Classified player OLX  and the several entrepreneurs in Kenya will have to battle it out fighting for loyal customers as the scene gets many heavy budget promotional budgets. Kenyan entrepreneurs might either learn from multinational entrants and raise their game or we shall be trailing behind them.

Better to be the head than the tail.

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