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Nairobi rises six places in startup friendly rank
The skyline of Nairobi CBD on June 23, 2021. The CAIPS aim to help Kenya reverse its reliance on imports, shifting from 80 percent imported consumption to greater local production.
Kenya’s capital Nairobi has risen six places to become the 107th most preferred city for startup ventures globally, moving from position 113 last year, on the back of enhanced private and public sector investment in supportive structures.
Nairobi’s rise came in a period the overall ranking for the country improved five spots to the 58th place up from rank 63 last year, in a first positive momentum after years of stagnation and decline.
The latest Global Startup Ecosystem Index report published by sector research platform StartupBlink further shows that in Africa, Nairobi has remained steady in the third rank for the second year, while maintaining leadership in Eastern Africa for five straight years.
This year, Kenya has broken into the global top 60 list for the first time ever, reversing a regression that saw it drop one slot to hold position 63 last year down from 62 in 2023.
According to the report, among initiatives that have propelled Nairobi’s rise in the past year include the Kenya Innovation Bridge, which is a digital marketplace designed to connect innovators with partners, funders and consumers.
StartupBlink has also attributed the improved performance to the introduction of a digital nomad visa in October 2024, which allows remote workers to live and work in the country in the broader aim of attracting global talent and position Kenya as a desirable destination for digital professionals.
“International development partners also play an important role in supporting Kenya’s innovation ecosystem. The UK’s Foreign, Commonwealth & Development Office (FCDO) has collaborated with local institutions and ecosystem actors to strengthen innovation capacity, support skills development, and promote inclusive digital growth,” reads the report in part.
“Besides public sector efforts, Nairobi is home to regional offices of global tech giants like Google, Microsoft, Samsung, and Intel, which makes the city attractive to tech startups.”
During the review period, Kisumu dropped off the global top 1,000 list just after it had joined for the first time last year, while Mombasa rejoined the club after one year outside, ranking 916th globally and second nationally.
The country and its capital’s improvements come at a time when local news headlines are awash with reports of entrepreneurial struggles as startups fold down while others scale back operations on what they have primarily termed as a prolonged funding drought.
An analysis by Business Daily shows that at least eight notable Kenyan tech startups have closed shop in the past three-and-a-half years despite absorbing a combined total of Sh11.2 billion while scores more are exhibiting distress signs.
Although most of the startups blame their troubles on the funding drought, available data and interviews with founders suggest other factors, including the viability of their business models and most recently, unfavourable and unpredictable taxation regimes.
