The take-away
- Kenya’s success story began in 2007 with the invention of the mobile payment system M-Pesa.
- Many start-ups in Kenya have found a niche by focusing on sustainability.
Simon Mathenge is an entrepreneur with high hopes for Kenya’s burgeoning recycling industry. “I want a future where Kenya imports waste plastic from other countries, so we can help clean up their environment after we’ve cleaned up our own,” he says. As the founder of Mazingira Safi Innovations, which uses recycled plastic to bond cement and sand into paving blocks, Mathenge is one of many Kenyans trying to gain a foothold in a rapidly growing sector.
Every day Nairobi, the capital, generates 3,000 tons of waste, of which 12% is plastic. At the same time, the demand for new houses is growing at a rate of 600 per day. “We wanted to produce something that could lower the cost of construction while using as much waste plastic as possible,” Mathenge explains. This ability to spin current problems into future market opportunities could help Africa’s Silicon Savannah establish a truly effective circular economy.
Look past the usual crop of Uber copycats (Maramoja and MyTaxi) and delivery services (Sendy), and something important is happening: Kenyans are creating companies that are focused not only on profit but also on addressing national priorities. According to Partech Venture, Kenya has become the second most attractive African nation for foreign investment, after South Africa. Last year Kenyan start-ups raised $147 million. That may seem low by European standards, but for a developing African economy which still struggles with widespread corruption and inadequate infrastructure, it is a promising signal that confidence is on the upswing.
The pillars of success
Kenya’s unique start-up scene was founded on three pillars: a mobile payment system called M-Pesa; a centre for tech entrepreneurs called iHub; and a government commitment to long-term investment in information and communications technology (ICT). Launched in 2007, M-Pesa now has around 20 million users – more than two-thirds of the adult population. Around 25% of the country’s gross national product flows through it. “M-Pesa grew so quickly because it gave so many marginalised people access to banking services,” Mathenge explains. “There was such a huge gap in the market.” Three years later iHub was launched on Ngong Road, which is now synonymous with African tech. The centre has since registered 15,000 members, offering lab space to young Kenyans and opportunities to interact with technologists around the globe.
Around the same time, an undersea fibre optic cable arrived in the port city of Mombasa, significantly increasing broadband throughout East Africa. The project was the vision of Bitange Ndemo, permanent secretary in the Ministry of Information and Communications, who also created the template for Kenya’s ICT policy. The country’s next infrastructural milestone will be the €12 billion Konza Technology City, aiming to generate 100,000 jobs by 2030 in a thriving ICT sector. Though the project’s mounting costs and delays have generated controversy, it has also created a sense of optimism about the opportunities for younger generations. “It is reaching us at a good point in time,” says Mathenge. “The start-up scene is growing, with new graduates and investors getting involved all the time.”
Better future for farmers
Another growth sector is agriculture. According to the Food and Agriculture Organization, fertiliser sold in sub-Saharan Africa is the most expensive in the world, partly because rural farming is so dispersed. Start-up Safi Organics uses specially developed machinery to help farmers convert their waste into organic fertiliser at the source. “These start-ups are helping farmers gain the knowledge they need to be successful,” says Mathenge. “We realised we had to change the culture and beliefs of the farmers,” explains founder Samuel Wanderi Rigu. The company set up demonstration plots and worked closely with farmers to gain their trust. Their efforts paid off. “We had one client in 2014 but ended 2015 with 30,” Rigu recalls. “Currently around 2,500 farmers work with us.”
The Danish connection
One country working hard to build relationships with Kenyan entrepreneurs is Denmark. In March 2018 the Danish Ministry of Foreign Affairs placed a “TechVelopment Advisor” in Nairobi as part of an initiative to strengthen its presence in the tech field globally. In October more than 800 participants from around the world convened in Copenhagen at the inaugural P4G Summit – a global initiative for developing public-private partnerships that deliver on the UN’s Sustainable Development Goals and the Paris Climate Agreement. The Technical University of Denmark (DTU) with its DTU Skylab was heavily involved in organising P4G and, with support from the tech ambassador in Nairobi, identified successful entrepreneurs to invite, including Mathenge and Rigu.
In addition, Danish students have been in Kenya to share their technical knowledge. Last year DTU design engineers Sofie Bejder and Maria Ellyton worked with Kivumbi Plastic Recycling, based in the town of Kericho, to help optimise their sorting and cleaning processes. “We’d worked on similar projects in Denmark but of course building a solution in another culture is a very different challenge,” says Bejder. Many of the Kenyan founders believe young entrepreneurs need more support. “Most people involved in promoting a circular economy are in their twenties,” says Mathenge. “What they are lacking is mentorship. They need to know, for example, how company valuations work and how to benefit from best practices in research and development.” Rigu concurs: “Hopefully the next Steve Jobs will come from Kenya!”