By TREVOR ANALO
Eight years since Kenya gave the world M-Pesa and Ushahidi, the country has become a hub of African innovation. The iHub, m:lab, Nailab and C4Dlabs, show how young digital-savvy Kenyan tech entrepreneurs are transforming lives. Several start-ups and mobile applications have been launched to provide practical solutions to Kenya’s development challenges in education, health and agriculture. But since the launch of M-Pesa and Ushahidi, a crowdsourcing platform used across the world to map conflict, has Nairobi developed any other application of this scale? Or has the emergence of Nairobi as a major tech city been overblown?
Some experts have warned that there is a lot of hype surrounding some of the applications launched recently, and that readily available donor money — which was instrumental in setting up the several tech hubs in the capital — is hindering innovation and potentially stifling growth. A 2014 “Digital Entrepreneurship” survey by GSMA found that about 70 per cent of 230 startups in Kenya are struggling to maintain their operations, and a solid 38 per cent of founders admitted to not having the business know-how to run their companies properly. As a result, some major funders have opted out of Nairobi for hubs in Lagos and Cape Town, where they think they will get higher returns for their investment. The East Africa Private Equity Confidence Survey released last year by Africa Assets and Deloitte Consulting found that Kenya is trailing Nigeria and South Africa in attracting capital in the technology industry.
88mph, an African seed fund, which has invested in more than 20 startups in Kenya, pulled out last year to focus on Nigeria and South Africa, which are preferred by investors despite receiving much less media attention than Kenya. In an interview with the UK-based magazine Wired, the 88mph programme manager in Nairobi, Nikolai Barnwell, said his fund was moving to Lagos because it was much easier for startups to grow into viable business models, unlike in Nairobi. “In Lagos, there is no fluff. It’s hard business, tough deals, the right kind of business. The first investors made good money. The ecosystem is very healthy,” he said. “When you look at the infrastructure here [Nairobi], we should be miles ahead. But there’s so much fluff money, no hard talk, NGOs [are] propping businesses up … it kills it.” The several “hackathons” and competitions held in Kenya helped connect tech entrepreneurs and even led to the emergence of the dozen tech hubs in Nairobi. But too many young developers are now focusing on winning these challenges rather than steadily building their ideas into sustainable business models.
http://www.theeastafrican.co.ke/news/Is-Nairobi-no-longer-the-innovation-hub-of-Africa/-/2558/2854354/-/12rycd1/-/index.html
