Startup Guide Nairobi: how ‘Silicon Savannah’ is a hub of creativity, tech and impact

By Madanmohan Rao|24th Jan 2021
This guidebook covers emerging startups, accelerators, investors and support institutes in this vibrant business hub in East Africa.
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Launched in 2012, YourStory's Book Review section features over 285 titles on creativity, innovation, entrepreneurship, and digital transformation. See also our related columns The Turning Point, Techie Tuesdays, and Storybites.


The Startup Guide series of books, launched in 2014 by Copenhagen-based publisher Sissel Hansen, covers over 40 cities around the world. See our reviews of the guidebooks for New York, Los Angeles, Berlin, Munich, Zurich, Paris, Barcelona, Stockholm, Vienna, Johannesburg, Cairo, Tokyo, Bangkok, and Singapore.


Startup Guide Nairobi is spread across 180 pages and makes for an informative read, with profiles of founders, co-working spaces, incubators, and other ecosystem players. The whole book series is insightful, superbly illustrated, and well-designed.

“In recent years, Nairobi has developed a thriving startup scene and made a name for itself as a tech hub – so much so that it’s been dubbed Silicon Savannah,” Sissel Hansen begins.

Fintech and ecommerce startups rub shoulders with impact-driven entrepreneurs, and the entrepreneurial youth have a strong focus on founder purpose and mission.


The Kenyan capital is regarded as “the mother of mobile money” and “a mecca of innovation and diversity,” according to Esther Mwikali Muia, General Manager, Mettā Nairobi. The city has more than 200 tech-focused startups, and offices of tech giants Google, IBM, Intel and Microsoft.


Notable progress has been made recently by startups like Twiga Foods (connecting farmers to markets via mobiles), Cellulant (digital payments platform), and M-Kopa (solar energy).

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Overview

With a population of around 4.5 million, Nairobi has been ranked as the sixth-wealthiest African city, and a friendly city for startups as well as expats. In 2019, Kenyan startups reportedly raised $428.91 million (the second-highest in Africa).


One section of the book provides an overview of the city’s business environment and lifestyle, such as people (extremely entrepreneurial), traffic (congested), market prices (‘negotiable’ in outdoor stores), weather (mild year-round), and transportation ("much-maligned" matatu minibuses).


Mobile money app M-Pesa paved the way for a range of other fintech players and products. A range of ISPs is active: Safaricom, Airtel, Telkom Kenya, Zuku, and Faiba.

I. Startup profiles

One section of the book profiles nine startups based in Nairobi, with inspiring origin stories and business descriptions. They include Safi Analytics (cloud-based operational platform for factories to improve productivity).


Ajua provides businesses with customer-experience analytics like mobile surveys, as well as mobile wallets to map consumer spending habits. BuuPass, founded by Wyclife Omondi and Sonia Kabra, provides information and booking services for travellers and shippers.

Food4Education provides lunch meals to children who attend public primary schools. “Our vision is that no Kenyan child will have to learn while hungry,” says founder Wawira Njiru.

Hope Tech Plus uses sonar and echo-location along with IoT and ML to provide mobility tools for the visually-impaired. Sanivation converts faecal matter into biomass fuels, which can be used to replace traditional firewood, thereby curbing deforestation.


Sendy has end-to-end logistics solutions for SMBs, while Sokowatch provides logistics and financial services for B2B ecommerce. Taimba helps smallholder farmers get access to market prices and form cooperatives.


Many of the founders benefited from competitions like Disrupt Africa Live Pitch Competition, Hult Prize Challenge, and Chivas Regal Venture competition. Others received investment from DEG Upscaling, Toyota Tsusho Corporation, Yamaha, Quona, 4DX Ventures, Enviu, and the DOEN Foundation.

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II. Startup ecosystem

One section of the book profiles the support system for startups, ranging from incubators to accelerators. For example, Village Capital supports accelerators; its cohorts consist of 10-14 teams. It has a special focus on female founders, and its portfolio includes Nigerian fintech startup PiggyVest.


1Million Startups East Africa is a local chapter of a global entrepreneurship community supporting the United Nations’ Sustainable Development Goals. It runs an accelerator, the EVELVATE investment-readiness programme, and a women’s hub called Women Biz360. It has supported startups like Chicken Basket (poultry farming), Saba (accessories label), Mula Export (agribusiness for smallholder farmers), and Wachia Agencies (luggage lockers).

GrowthAfrica’s accelerator has a six-month programme for cohorts. It has supported over 400 entrepreneurs across 250 businesses.

Pangea Accelerator focuses on sectors like education, health, housing and waste management. It has also invested in more than ten businesses. Its portfolio includes fintech startup WorkPay Africa.


Singapore-founded VC firm Antler has a presence in Nairobi as well, and has supported a number of cohorts. Some of the startups extended or pivoted services during the pandemic.


Managers of these institutes offer several tips for founders, ranging from mindset to market share. Founders should be passionate as well as open-minded and flexible. They should be self-aware, and seek and value guidance from mentors and coaches.

Founders should have a proof of concept and find a path to a scalable solution. They should lead by example, and be ready to iterate fast to test and improve their ideas.

Founders should be collaborative and bring together a strong team. They should have a deep understanding of their industry and build technical expertise. Founders should align with the SDGs, and have a demonstrable purpose.

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III. Co-working spaces

Nairobi has a number of co-working spaces, some of which specialise in certain sectors and communities. For example, Kijiji supports socially-minded businesses.


Kayana supports women entrepreneurs, and also shows its commitment to the circular economy by reusing materials discarded from building construction. UTU House / Nairobi Game Development Centre supports coders in the gaming sector.


The Foundry has a range of spaces, and also hosts a gallery to showcase local artists. Mettā Nairobi is part of Nest Group Africa, a subsidiary of the Hong Kong–based Nest Group Global. Nairobi Garage also hosts several corporate-innovation teams.

iHub was founded in 2010 by entrepreneur Erik Hersman and four others as a space for Kenya’s tech community. It also features framed photos of African tech pioneers.

Ikigai was founded by sisters Nyambura and Wachuka Gichohi. Its members include Girls Not Brides (to end child marriage) and Book Bunk (restoring public libraries).


The book also profiles the “Face of the Space” in these organisations. For example, Alex Owiti of Usiku Games started his career as a print journalist and editor. Foundry CEO Roy Wachira also runs a digital marketing startup, Camouflage Media. Ikigai’s Nyambura Gichohi was earlier marketing manager for Microsoft Africa.

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IV. Expert insights

One section of the book provides tips from experts, covering tech strategy and funding approaches. Founders should leverage technology as a strategic enabler, advises Hardeep Sound, Regional Leader, East Africa, SAP.


Pandemic resilience was showcased by startups like Health-E-Net (telemedicine platform for a global network of volunteer medical professionals), MyDawa (app to purchase medical supplies), and MomCare (services for pregnant women). SAP’s Ariba Network also helped reduce disruptions in production supply chains.


“Pitch the business and not the product. Investors want to know about the business and how it will scale, not only about the product and its features,” advises Stephanie Nguku, Founder and Managing Partner, Upscale Consulting, which runs a programme called Become Investor Ready. Founders should have clarity on their business model and how there is an opportunity for profit.

V. Founder advice

The book features interviews with founders of five startups. The profiled founders trace their entrepreneurial journeys, lessons learnt, and tips for the next wave of aspiring entrepreneurs.


Hilda Moraa founded digital financial marketplace Pezesha to connected SMBs to lenders. Her earlier startup was Wezatele (mobile-based logistics support). She was also a member of the founding team of iHub Research, and wrote the book A Kenyan Startup Journey.

Founders should cultivate “an unshakeable sense of trust,” and be willing to learn and relearn during their long journey. They should be able to convince others to believe in the vision, Hilda advises.

Jessica Colaço, Co-founder of iHub, has also launched the HR-tech startup Brave. Its customers include ecommerce giant Jumo. “We have to be willing to listen. Customer needs and products can change a lot. COVID-19 is an example of how fluid one should be,” she advises.


While it’s important to listen to colleagues and customers, founders should also have their own point of view. “Being an entrepreneur can be very isolating, and that can have a big impact,” Jessica cautions. Hence the importance of support systems as well as hobbies and music.


Samuel Gikandi and Bilha Ndirangu are founders of Africa’s Talking, an API platform. The original concept was a message board for positive stories, but they pivoted from this. It supports over 25,000 developers, and runs the AT Labs training site.


“You have to understand your environment and listen to your customers because the reality could be quite different from your expectation,” Samuel advises. “It’s important that entrepreneurs build businesses that are resilient and can withstand a lack of cash injection,” Biha cautions.

Many of the founders appreciate Nairobi as a startup hub due to the government support for ICTs, and the movement of young people driving the change for a better Kenya.

The founder also shares the most valuable piece of advice that they have been given: Trust the process – there’s a divine plan moving through everything; and People do business with people they know, like, trust and value.

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VI. Schools

One section of the book profiles the entrepreneurship programmes of the city’s universities, as well as a growing crop of entrepreneurship support programmes. For example, The University of Nairobi, Kenya’s oldest and largest university, offers an MSc in Entrepreneurship and Innovations Management.


Strathmore University hosts @iLabAfrica (ICT research) and @iBizAfrica (incubator). It supports the Open Innovation Programme, Standard Chartered Women in Tech Programme, Idea Foundation Seed Stage Accelerator, World Bank Negawatt Challenge, and Safaricom’s App Whizz Challenge


The Amani Institute for social impact was founded in 2011 by Roshan Paul and Ilaina Rabbat, from India and Argentina respectively. It has a presence in Nairobi, Sao Paulo, and Bengaluru. Its six-month Social Innovation Management (SIM) programme supports social entrepreneurs as well as corporate intrapreneurs.


Moringa School has a blended learning model with trainers and mentors, with courses in software development and data science across a number of cohorts. The Technical University of Kenya (TU-K) offers specialisation in entrepreneurship and innovation management.

Advice for aspiring founders given by programme heads of these schools includes the importance of vision, courage, empathy, community support, and commitment to make an impact.

Founders should be willing to challenge assumptions and worldviews (including their own), and be ready to learn and unlearn. They should be ambitious, have a global mindset, and have a plan for achievement. Founders should have strong self-discipline, time management skills, and an independent drive.

VII. Investors

The last section of the book profiles eight investing firms, along with sample portfolios and advice for founders. For example, AHL Venture Partners has supported more than 35 impact-driven businesses and funds across 27 African countries.


“You can build a massively successful business by serving the low-income mass market as the engine of growth,” says Niraj Varia, a partner at Novastar Ventures. It has supported Bridge International Academies, Sanergy, and mPharma.


Chandaria Capital was established by brothers and serial entrepreneurs Darshan and Neer Chandaria. Its portfolio startups include Sokowatch (app for affordable ordering) and Kobo 360 (long-haul logistics).


HEVA Fund is focused solely on creative ventures in fashion, television, music, and gaming. Its initiatives include the Cultural Heritage Seed Fund, Young Women in Creative Industries Fund, and Growth Fund.


Kepple Africa Ventures was founded by Ryosuke Yamawaki and Takahiro Kanzaki from Japan. It invests in fintech, logistics, health and agriculture, and also connects African and Japanese players for market opportunities and funding.

Safaricom Spark Fund provides an investment of over $1 million in tech-driven startups, including iProcure, Sendy, Ajua and Eneza.

In 2015, India-based incubator Villgro Innovations Foundation launched an incubator in Nairobi for healthcare and life sciences startups. In addition to financial investment, it leverages a broad network of mentors and advisors,


The investors offer a range of tips for founders. Present data that underpins your idea. Substantiate the business narrative with cogent data. Be resilient in the face of crisis. Be prepared to synergize. Deliver on your ideas. Express what makes you unique.


Hold yourself and your team accountable. Be willing to hear feedback, and have the humility to accept criticism. Respond effectively and be robust to stand up again. Find and fix your weaknesses.

The “boring stuff” like processes, tax, and structuring actually does matter. It is important to understand your industry’s history, future, risks, and opportunity

Investors look for a big idea that is an order of magnitude higher than other ideas. It should be able to grow exponentially at a low marginal cost through frugal innovation, and leverage technology for scale and seamlessness.

7

The book ends with a glossary of terms and a directory of useful resources for startups, such as investors, meetups groups and events. For example, forums and events include Nairobi Startup Founder 101, Africa Women in Technology Conference, Nairobi Garage, Africa Law Tech Festival, Fuckup Nights, Nairobi Stew, Nairobi Design Community, and Nairobi Innovation Week.

In sum, the book provides informative and entertaining insights into Nairobi’s startup ecosystem, as well as a useful framework for other cities to reflect on and improve their own startup ecosystems.

YourStory has also published the pocketbook ‘Proverbs and Quotes for Entrepreneurs: A World of Inspiration for Startups’ as a creative and motivational guide for innovators (downloadable as apps here: Apple, Android).


Edited by Kanishk Singh