Kenya’s growth was strongest in Africa’s VC market; clean tech, e-commerce pulled in most of the funding – TechCrunch

As VC activity slowed down globally last year, Kenya defied odds to record the strongest growth in funding raised in Africa. Reports show that the deal count and value to the country surpassed 2021 figures owing to increased investor interest.
Data from market intelligence firm Briter Bridges, and The Big Deal shows Kenya raised $1.1 billion, more than double the funding that East Africa’s biggest economy got in 2021, when the continent raised about $5 billion.
Another report by Partech, which excluded Sun King’s mega round, also shows that Kenya’s funding spiked by 33% last year, to a record $758 million.
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Partech placed Kenya fourth in the list of the top VC destinations after Nigeria, South Africa and Egypt, respectively. The four markets account for over 70% of the total VC funding in Africa.
Briter, which included country ranking this year, and Big Deal positioned Kenya as second in VC destination after Nigeria, which took the lead after raising $1.2 billion, despite the deal number and value dropping. When compared to the previous year, the amount invested in Nigeria dipped by over 36%, according to Partech, and 20% as per Big Deal’s data. South Africa’s funding stagnated as per Partech while Big Deal data shows a 42% decline.
The reports show that Kenya recorded the strongest growth in the continent, as Egypt’s VC funding grew slightly too. Overall, Africa reported an increase in invested amount last year; Partech put the figure at $6.4 billion, Briter Bridges at $5.4 billion and Big Deal at $4.8 billion.
Clean tech and e-commerce
Nearly all sectors in Kenya experienced increased VC interest; however, clean tech, e-commerce, fintech and food and agriculture verticals accounted for the bulk of the activity.
The clean tech sector received the greatest VC interest in Kenya, as it accounted for nearly half of the total capital raised by Kenyan private venture-backed companies — buoyed by Sun King’s mega round and M-Kopa’s funding. Both PAY-Go scale-ups are providers of solar home systems, but M-Kopa’s platform now includes financing of a range of products and services.
Other clean tech ventures that attracted venture backing include BasiGo, an EV startup trying to electrify Kenya’s public transport sector currently dominated by fossil-fuel buses.
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Investor interest in clean tech ventures aligns to last year’s global trend that saw more capital injected into businesses that are mitigating climate change. It is expected that the clean and climate tech verticals, and more narrowly in Africa, will continue to pull VC dollars amidst slowdown in funding.
Scale-ups in the e-commerce sector like Wasoko and MarketForce; B2B platforms enabling informal traders to source goods directly from manufacturers and distributors; and Copia, an e-commerce platform that taps its network of agents to serve customers in rural areas, also pulled in investors too. The aforementioned raised big rounds that saw the vertical emerge as one of the most positively impacted by VC funding.
Fintechs also continued to attract most funding on the continent as Africa, the world’s second-fastest payments and banking market, grows. However, in Kenya, the vertical was third in VC preference, evaluated by deal value. On the other hand, the vertical experienced the most activity in terms of deal numbers.
Meanwhile, despite Kenya experiencing the enormous growth last year, the market was not spared by the effects of VC slowdown, as some businesses like Kune and WeFarm wound up, as others like Twiga, Sendy and MarketForce cut their staff numbers as they adjusted to new fundraising realities.
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