Ruto Reveals Plan To Save Kenyan Startups

President William Ruto has moved to create a better environment for startups trying to make their mark in the country.

Speaking during the launch of the Ksh50 billion Hustler Fund at Green Park Terminus in Nairobi on Wednesday, November 30, the Head of State announced that the Cabinet will approve a Start-Up Bill on Tuesday, December 6.

While explaining the four different products that are featured in the loan kitty, he promised that the bill will provide a means to attract startup opportunities and save those in trouble, especially those operating on online platforms.

Kenyans working on their laptops. /FILE

"Unregulated Chamas will get up to Ksh10 million, and regulated Saccos and Saving groups will get between Ksh10 million to Ksh100 million.

"This coming Tuesday, as a Cabinet we will pass the Start-Up Bill so that we can begin to attract, provide and de-risk startups, especially those that are on the digital platforms. We can work with them and we will make sure that startups will have a chance to be funded because today we have many ideas, many interventions, and many apps that don't go very far because there is no startup capital," he said.

He added that the Cabinet members will also be echoed by members of the National Assembly in passing the bill so that Kenya has more chances of investment by potential entrepreneurs.

"Members of Parliament will help us so that next week when we pass it in Cabinet, it will go to Parliament so that we can be able to take our investment and our opportunities to the next level," he added.

Difficult market conditions as well as funding hitches have been responsible for the demise of prominent startups such as Kune Foods, Notify Logistics, WeFarm, BRCK, Sendy and Sky-Garden in 2022 alone, damaging Kenya's chances of becoming the Silicon Savanah of Africa.

Anza Now CEO Bobby Gadhia, whose initial tech firm PC World Limited collapsed in 2016 after being in the game for 21 years, had previously attributed the rapid collapses to entrepreneurs’ above-average ambitions.

“Most start-ups and entrepreneurs are emotional and over-optimistic about their business ideas. They start these ideas without proper planning and they are disillusioned by the success of Silicon Valley,” Gadhia revealed to the Business Daily.

In his view, the majority of tech investors are driven by greed for quick money and hence do not make proper cases for their businesses before starting.

“The tech sector is one of the most stressful and demanding that one can ever venture into. You have to possess balls of steel to navigate and survive. It is not for the faint-hearted," he added.

The latest casualty saw the electric vehicle taxi-hailing app NopeaRide announce its exit from the market on Tuesday, November 29, four years after it launched its operations in August 2018. Its partner company, EkoRent OY, decried that it was leaving the Kenyan market after it failed to raise additional funding to keep it afloat.

“We have taken our fleet of electric vehicles off the road and have notified our staff and corporate clients. We are now working with relevant authorities to ensure that our operations are wound up in accordance with local legislation."

Within five years, NopeaRide imported 70 electric vehicles to Kenya and its drivers have covered 4,000,000 kilometres by June 2022 saving over 650 tons of CO2 emissions. It also operated the largest electric vehicle charging network in East Africa.

Its exit comes a year after it received Ksh24.5 million (€200,000) in funding to build more solar charging hubs in Nairobi and increase its service radius in anticipation of its growth.

Nopea Ride taxis in Kenya. /FILE