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Kenya has defied a global funding drought for budding companies to post a 17 percent increase in new start-up investments, toppling Nigeria and Egypt as the continent’s largest destination for start-up financing.

In 2023, 62 Kenyan start-ups raised an estimated US$673,78 million from local and international investors, a rise from the $574,8 million raised in 2022, even as the rest of the continent saw a drop in funding, data by start-up research organisation, Disrupt Africa shows. Nigeria and Egypt, which dominated the start-up funding space in Africa over the past decade, 2023 recorded a drop, which resulted from a global slowdown in investments due to a cocktail of macroeconomic challenges across the world.

“Unlike elsewhere on the continent, Kenya’s total funding is up,” said the report published this week. “Kenya had an overall positive year in 2023, with its total amount of funding actually rising on 2022 levels, although the number of start-ups to secure funding was down like most other destinations.”

In Kenya, most of the funding raised last year went to energy start-ups, with off-grid solar pay-as-you-go firms M-Kopa and Sun King raising US$465 million, or 69 percent of the start-up funding received. Sixteen of the companies were fintechs, nine were e-commerce businesses, seven agri-tech, and five were in health-tech and logistics technology.

“Though the number of start-ups to raise funding in 2023 was down, Kenya nonetheless bucked pan-African trends with the total amount of funding growing, as well as the level of employment created by the start-up ecosystem.”

Twenty-five, or 36 percent, of the 69 start-ups raised at least $1 million last year, a drop from 49 in 2022, but still a higher proportion than in other countries on the continent.. — The East African