French social enterprise CityTaps, which raised around $6M to bring prepaid smart water meters to Africa’s urban poor, has seen its Kenyan operations collapse into liquidation, marking another high-profile failure in the country’s struggling impact startup ecosystem.
An insolvency notice published this month confirmed that CityTaps Kenya Limited is undergoing a creditors’ voluntary liquidation. A meeting for creditors was convened on July 24, 2025, to confirm the appointment of a liquidator and review the company’s financial state, following a resolution by shareholders on July 4 to wind up the company.
The move comes just three months after its French parent company, CityTaps S.A.S., was put into compulsory liquidation by a court order in Neuilly-sur-Seine on April 14, 2025, signalling a systemic collapse of the entire venture.
The Promise: Turning on the Taps with Tech
The failure marks a stark end for a company once heralded as a pioneering solution to one of urban Africa’s most persistent problems. Globally, hundreds of millions of people in cities lack reliable access to piped water, while public utilities struggle with inefficient revenue collection and water losses.
CityTaps’ solution, CTSuite, was designed to tackle both problems. It combined an IoT-enabled smart water meter (CTMeter) with a software platform (CTCloud) that allowed customers to pre-pay for water in small, manageable amounts using mobile money.
The promise was twofold:
- For consumers: Low-income families could access clean, running water 24/7 without facing large, unexpected bills, effectively ending their reliance on expensive and often unsafe water from informal vendors.
- For utilities: By receiving payments upfront, cash-strapped water companies could secure their revenue, reduce debt, and improve their balance sheets, enabling them to invest in maintaining and expanding the network.
A grant-funded pilot in Niamey, Niger, with utility SEEN and operator Orange, showed significant potential. According to project reports, utility revenue collection efficiency exceeded 100% due to advance payments, and 43% of customers became new mobile money users.
The Model: An Ambitious Bet on Leasing
Backed by a cohort of impact investors and venture capitalists including the GSMA Innovation Fund, Global Innovation Fund, Echo River Capital, Vitol, and XL Africa, CityTaps was scaling an ambitious business model.
Recognising that public utilities could not afford the high upfront cost of its smart meters, the company devised a Pay-As-You-Go (PAYG) leasing model. The plan was for investors to finance the hardware, which CityTaps would then lease to utilities. The utilities would, in turn, repay the lease from the secure, prepaid revenue collected from customers.
This model was being trialled in Kenya, where the company had secured grant funding for a project with the Malindi Water & Sewerage Company (MAWASCO).
A Familiar Story in Silicon Savannah
CityTaps’ failure is not an isolated incident but the latest in a string of insolvencies that have cast a pall over Kenya’s “Silicon Savannah.” It joins a growing graveyard of well-funded, mission-driven startups that have recently folded, including off-grid provider SolarNow, agritech firms iProcure and WeFarm, and logistics company Sendy.
This wave of closures points to systemic challenges that extend beyond the performance of any single company. While the exact reasons for CityTaps’ downfall have not been made public, its asset-heavy leasing model was inherently vulnerable to shifts in the funding climate. Such models depend on a continuous flow of patient, long-term capital to finance the hardware — a difficult proposition in the current global VC downturn.
The fact that the French parent company was liquidated first suggests the problem was central to the business strategy, rather than a failure specific to the Kenyan market.
The collapse also highlights a broader weakness within the ecosystem: a heavy reliance on foreign development finance and impact investment. The recent closure of the USAID mission in Kenya and budget cuts to the US Africa Development Foundation (USADF) have constricted a critical pipeline of early-stage, high-risk capital that many social enterprises depended on.
A Lesson in Sustainability
The demise of CityTaps raises difficult questions about the suitability of the venture-capital model for solving fundamental infrastructure problems. While technologically innovative, the “growth-first, profit-later” mindset, funded by equity that demands high returns, can be a poor fit for essential services like water, which require long-term stability and resilience over rapid, risky scaling.
As the liquidator, Tom Mungai Ouma of Nairobi Forensics LLP, begins the process of winding up CityTaps Kenya, its story serves as a cautionary tale. The narrative of technology saving the world’s poor is compelling, but sustainability requires more than a successful pilot and a good pitch deck. For many in Nairobi, the path forward may lie less in chasing the next billion-dollar valuation and more in building resilient, cash-positive businesses that can weather the unpredictable cycles of international funding.