The startup scene in Kenya has entered another phase in its path to maturity pegged mostly on lessons learned over the past few years. Everyone in the ecosystem is seen to be adapting and positioning as future opportunities start coming into focus and reality sets in.
Entrepreneurs getting into the game now are fully aware of the full bodied propositions that they must present to discerning consumers; after all the best source of capital is a paying and hopefully returning customer. The pools of easy money hitherto available from clueless angel investors eager to get piece of the action and a plethora of hackathons that celebrated our kindergarten steps have dried out. Teams with solid ideas now have to deliberately court sources of capital and spend time aligning with their chosen publics as they continue to build and roll-out their services.
The hubs and labs have had to take a fresh look at their model most having adopted the Y Combinator model of a time bound co-working space residency, a runway fund and a small take on equity. They have had to supplement their funds through additional income streams such as hosting events, renting out space for functions and opening up to non-portfolio companies who pay per seat. This goes to show that different markets have unique dynamics and models cannot be married blindly.
As the solutions being created targeting the visible and not so visible opportunities, owners of serious capital are now looking to set anchor. Safaricom for example, who were early movers with a series of false starts attributed to their perceived reputation within the startup community recently announced a fund that will seek out fresh and scalable ideas. This is an obvious progression as they have held a number of developer challenges each a marked improvement from its predecessor. Angel investors are also coming together under one umbrella with different chapters set to be established across Africa. While the more established funds do not give even a fleeting glance at startups, opting to de-risk their investments local angel networks are looking to fill in that gap, a move that can prove hugely profitable if the portfolio is well curated.
A welcome progression that moves us away from the headline driven agenda of vanity app launches and hopefully ushers in a season of an intricate exploration of opportunities across the B2B, B2C and C2C fronts as data emerges and continues to inform the morphing of the ecosystem, not just in Kenya but across Africa.