East Africa has been a leading region in startup funding, with a significant increase in investment since 2020. In 2020, East Africa secured 31% of the total investment, amounting to just $6 million more than West Africa out of a total of $1.1 billion. However, it was not until the slowdown in funding activity from mid-2022 onward that East Africa’s dominance became more pronounced. Since then, the region has accounted for 30% of all funding, surpassing other regions. In contrast, during the previous two-and-a-half-year period from 2020 to mid-2022, East Africa had trailed significantly behind, securing only 22% of the total funding compared to West Africa’s 41%. Overall, since 2019, East African startups have raised over $4 billion, representing 25% of the total investment across the continent.
Kenya has played a significant role in driving East Africa’s rise in startup funding. Since 2019, the country has secured $3.3 billion, accounting for 84% of the region’s total funding. Kenya’s dominance in regional funding has only strengthened over time, with the country consistently leading the continent in attracting investment since mid-2022. Among Africa’s ‘Big Four’ economies, Kenya stands out as the most overperforming relative to its economic size. In 2024, Kenya accounted for just 4% of Africa’s nominal GDP and population but attracted an impressive 29% of the continent’s total startup funding.
The top three recipients of funding in Kenya are Sun King, M-Kopa, and d.light, leaders in the pay-as-you-go off-grid energy sector. These companies have collectively raised nearly $1.5 billion since 2019, accounting for 44% of the country’s total funding. Following them are companies disrupting the retail and supply chain sectors, including Twiga Foods, Wasoko, and Copia Global, which have secured $400 million during the same period. However, some of these firms have faced challenges, with Copia entering liquidation and Twiga and Wasoko undergoing restructuring. Beyond these major players, more than 150 startups in Kenya have raised at least $1 million in funding since 2019.
While Kenya dominates the region’s funding landscape, other East African countries have also attracted notable investment. Tanzania has raised nearly $300 million since 2019, ranking seventh on the continent. Half of this amount went to Zola Electric and Nala. Uganda follows as the region’s third-largest recipient, with Tugende and Asaak accounting for half of its total funding during the same period. Rwanda is the only other East African market approaching the $100 million mark, while Ethiopia and Sudan have also seen some funding activity.
Overall, East Africa has emerged as a prominent hub for startup funding, with Kenya leading the way in attracting investment. The region’s diverse startup ecosystem, coupled with a growing interest from investors, bodes well for continued growth and innovation in the East African startup scene.
