East Africa Top 10 Tech Startups to Watch

By Mary La Rocque, Associate

About the ‘East African Tech Snapshot’ Series: In July 2018, I-DEV surveyed leading investors, entrepreneurs, and tech sector influencers to uncover key strengths, opportunities and companies to watch.

This article is the 1st of 3 pieces highlighting our findings. See also:

Part 2. Driving Innovation in the East African Tech Sector

Part 3. Growing the East Africa Technology Ecosystem: Challenges & Opportunities


Top 10 Tech Startups to Watch in East Africa

The tech startup scene in the African continent is experiencing record-breaking growth and increased international attention. In 2017, African tech startups received over $560M in investment according to research by Partech Ventures (a 53% increase from $367M in 2016). While South Africa and Nigeria still lead in attracting tech investments for the continent, East Africa is rapidly grabbing diverting more attention and investment dollars, catalyzed by strong innovation hubs and incubators. Nairobi stands as the pillar and anchor of East Africa’s interest, attracting 26% of total investments into Africa.

Results from I-DEV East Africa Tech Survey showed strong evidence that Kenya continues to take a the lead in attracting attention and growing the ‘hottest’ companies to watch in East Africa, yet Rwanda and Uganda are beginning to attract investor interests as well.

When asked about the hottest companies to watch in East Africa, 95 % of the companies (77 of an incredible 82!) mentioned were Kenyan-based — an indicator that ecosystem thought leadership and knowledge is still focused predominately on Kenya. This article highlights the leading East Africa tech companies attracting survey respondents’ attention.

Top 10 Technology Startups to Watch

East Africa’s Tech Sector

From online career and recruitment platforms to providing software infrastructure for emergency response teams, the East African tech scene is targeting enhanced solutions and user experiences across a diverse range of sectors. The most prominent sectors for technology solutions are agriculture (Agtech), financial services (FinTech) and medicine & health tech.

Top 10 Tech Startups to Watch

1. Twiga: Twiga links farmers and vendors by sourcing quality produce to be delivered to vendors in urban areas. Later Stage*

2. Cellulant: Cellulant is a one-stop payments platform in Africa changing the way customers pay and get paid. Later Stage*

3. Africa’s Talking: Africa’s Talking aims to simplify the process and technologies required within mobile communication. Later Stage*

4. Sendy: Sendy is the delivery partner for moving packages door-to-door in Kenya. Early & Later Stage*

5. Sokowatch: Sokowatch enables informal retailers to order products at any time and receive free same-day delivery. Early & Later Stage*

6. Flare: Flare provides the software infrastructure and operational support for emergency response teams. Early Stage*

7. Lynk: Lynk helps connect Kenyan households and businesses with service professionals in the informal sector. Early and Later Stage*

8. Lori Systems: Lori Systems is a logistics coordination platform that seamlessly connects cargo owners and transportation. Early Stage*

9. Fuzu: Fuzu is a one stop shop for the largest selection of open jobs and insights into the East African job market. Early Stage*

10. Apollo Agriculture: Apollo Agriculture supplies farmers with high-quality farming inputs on credit, crop insurance, and voice-based training. Early Stage*

*Stages based on respondent categorization

Other highly-rated companies to watch include Branch, OkHi, Shortlist, Tala, KopoKopo, BitPesa, SunCulture, Moringa School, & PayGo Energy.

To download the full snapshot, go to: idevinternational.com/resources

Driving Factors of Success

What do these startups have in common? With recent capital raises and widespread media attention, all of the startups mentioned above are actively talked about and discussed within the ecosystem- across parties surveyed that focus across East and West Africa. For example, Cellulant recently raised $47.5M from TPG Growth Fund in its Series C, attracting widespread media attention, while Twiga continued to raise capital reaching ~$20M in investments from US to Middle East investors. The same players are mentioned in multiple conferences and events stressing the importance of active marketing in external perception of success. In addition, survey respondents identified these three factors are most critical to driving success for an early stage tech company:

Networks and Contacts: Without networks and contacts, even the most innovative product may never gain the right sales traction until a solid network is developed to help market and support the company for securing investment and business support.

Strong Management Team: The capacity and skillset of the management team are essential components for scale. A strong management team will develop the operational and financing plans needed to scale while also looking for unconventional solutions needed to achieve the shared vision.

Access to Advice and Mentoring: There are many startups that may have an innovative idea but are unable to find success within their first year. This is attributed less to a lack of financing and more due to a lack of structured mentoring. While East Africa has invested heavily in incubator programs to offer mentoring guidance, in many cases, strong technical and strategic support from experienced professionals is hard to reach and too expensive for early stage startups.

These are only a few examples of the emerging and ever growing East African startup ecosystem!

Conclusion

The diverse and rich East Africa tech ecosystem continues to bloom, strongly centered out of Kenya! This seems to be driven by strong investments into the country into startup ecosystem building, and rich and improving services to graduate companies from launch to early growth phases. The hottest startups are- not surprisingly- tackling some critical bottlenecks that affect large populations in the region- improved agricultural yields and trade, supply chain logistics and formalization, talent development and sourcing, and mobile communications and mobile payment solutions.

Keep an eye on these companies as they are primed for rapid growth!

OTHER LINKS:
East Africa Tech Snapshot: Download here!
‘Inside the C-Suite’ Podcast: Featuring Ken Njoroge, Co-Founder & Group CEO of Cellulant on company’s rise to success. Listen here!