Hi Max!

First, thank you very much for your and Maxime's Africa: The Big Deal newsletter and insights. It is a much appreciated source of information.

On today's (24 Oct 2023) Kenyan commentary, I think all that you say is true. However, I thought that I would ask you to consider something that I feel ails the Kenyan case. There is a significant influx of non-Kenyans who have chosen to settle in Kenya due to the country's attractiveness. This has included, particularly in several years pre-COVID, many non-Kenyans who have moved to Kenya and subsequently established startup companies.

From the little I have gathered, it is this influx of non-Kenyan entrepreneur that has attracted the bulk of the VC-backed and other equity funding that Kenyan startup companies have attracted. Of course there are exceptions to this, and many reasons have been cited for this. The most repeated that I have heard is that for various reasons, foreign equity investors feel some security in investing in companies run by their countrymen. I've also heard that it's driven by the lack of willingness for Kenyan investors able to do so to invest equity in Kenyan startups. Both these reasons tell a significant story.

However, it raises the question as to what the true picture to Kenya's inclusion in the Big-4 is actually driven by all-Kenyan-owned companies, as is mostly the case in each of the other Big-4. Is this something that you have considered at all in your gathering of news about investments in startups in Africa? I'm curious to hear your perspective and views on this.

Expand full comment

Dear Kimenyi,

Thank you very much for your comment.

The question of ownership is indeed a very important one. You might have actually noticed that we caveat this by not talking about 'Kenyan start-ups' or 'African start-ups' but instead 'start-ups in Kenya' and in Africa (unless our tongue slips).

Our database includes the names of CEOs and co-founders for each start-up/deal, so you could technically add an expat/local dimensions. We have done it with gender for instance. However, when we have considered running analysis on 'ethnicity' or 'nationality' in the past, we found it very hard for us to gather the data (if we base it on passport ownership for instance), but also to set clear criteria to be used for this analysis.

As I said many times in the past: I would be very happy to work with a researcher who would have built a robust approach to criteria setting and data collection on the topic. Unfortunately, no one's ever stepped forward so far.


Expand full comment

What are the possible causes for Ethiopia to have a low funding?

Expand full comment