Despite a series of high-profile collapses of prominent start-ups, Kenya has retained its position as the leading destination for venture capital in Africa, attracting $638m in 2024, according to data from Africa: The Big Deal. This marks the second consecutive year that Kenya has topped the tech funding charts, accounting for 88 per cent of the total $725m raised in East Africa, which in turn represented a third of all funding secured across the continent.

This resilience comes against a backdrop of a broader slowdown in funding across Africa. Overall, the continent saw a 25 per cent decrease in funding compared with 2023, largely attributed to a decline in debt financing. North Africa experienced a 35 per cent drop, despite Morocco raising $70m, while South Africa saw a 36 per cent decline. Central Africa, however, saw a ten-fold increase, albeit from a low base, securing $5m.

While Kenya’s dominance in East Africa is clear — Tanzania raised $53m and Uganda $19m — Nigeria remained a strong contender, attracting just over $400m. West Africa as a whole raised $587m, with Ghana securing $68m, Benin $50m, Côte d’Ivoire $33m, and Senegal $22m.

Much of the investment flowing into Kenya has been directed towards climate tech companies such as d.light, SunCulture, and Basigo. However, the year has also been marked by several significant failures, raising questions about the sustainability of some business models.

Among the most notable collapses was iProcure, an agritech company that went into administration in April 2024, despite having raised $10.2m in Series B funding in 2022. The company, which aimed to modernise Kenya’s agricultural supply chain, struggled with over-reliance on the fertiliser market and high operating costs. Despite its difficulties, iProcure’s technology remains operational, raising the possibility of a future revival.

Copia Global, an e-commerce platform focused on rural markets, declared Chapter 7 bankruptcy in May 2024. Having raised over $120m, the company’s ambitious expansion across Kenya and Uganda proved unsustainable, burdened by high operational costs and dependence on continuous capital injections. Its liabilities exceeded $45m.

Gro Intelligence, an agricultural data platform founded in Nairobi, also ceased operations in June 2024, despite securing $115m in funding and receiving recognition from TIME Magazine. The company struggled to translate its ambitious vision into a profitable business model, compounded by legal and operational challenges.

MarketForce, a B2B marketplace, also shut down in April 2024, despite having facilitated nearly $160m in gross transaction volume and expanding to five countries. The company cited economic pressures and failed funding commitments as contributing factors.

These failures highlight the challenges faced by start-ups in emerging markets, including the difficulties of scaling operations, managing costs, and achieving profitability. However, Kenya’s continued ability to attract significant investment suggests that investors remain confident in the country’s long-term potential as a hub for innovation and entrepreneurship in Africa. The focus now shifts to ensuring that future growth is built on more sustainable foundations.