Kenya Startup Failures Worsened By Flameout Of Once-Celebrated B2B Star

Twiga Foods raised USD 185 M to fix Kenya’s broken food supply chain. Last month, the company entered administration after nearly three years of job cuts and mounting debt, with creditors now lining up to recover what they can after an implosion that is the latest piece of a broader puzzle in Kenya’s tech scene.

The country’s startup ecosystem has something of a paradox at its core, as it has long been arguably the most stable of Africa’s four largest tech markets, with resilient infrastructure and a more predictable business environment, yet it has produced some of the continent’s most spectacular flameouts.

For one, Kenya has raised more venture capital than any other African market in recent years, yet clear successes of the scale and stature of some of the prominent startups in other top markets have not emerged, while a unicorn startup has also failed to materialise. This is unlike its peers, Nigeria, South Africa, and Egypt, which boast multiple billion-dollar companies. Kenya, despite its relative stability and investor appeal, has found this hard to come by.

Kenyan startups raised USD 984 M in 2025, outpacing Egypt, South Africa, and Nigeria, and accounting for nearly a third of all African venture funding that year. But a closer look reveals a lopsided ecosystem.

Debt made up 60% of that total, or USD 582 M. Equity funding, the kind that typically fuels hypergrowth and unicorn valuations, was less than USD 400 M. Four energy companies, d.light, Sun King, M-KOPA, and BURN Manufacturing, alone accounted for nearly 70% of the country’s venture funding. It could thus be deduced that Kenya is well-placed as a climate and asset-financing hub with a thin layer of other bets on top, not a broad-based startup powerhouse.

That concentration perhaps explains why unicorns remain elusive. Unicorns are typically born from equity-fueled scale, not debt-financed asset purchases. They emerge when consumer internet, fintech, or software companies achieve viral growth and high margins. Kenya’s funding profile tells a different story. Capital flows to solar home systems and electric motorcycles, capital-intensive businesses with long payback periods and modest valuations.

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The Twiga case illustrates the deeper structural problem. Twiga raised USD 185.4 M from blue-chip investors including Goldman Sachs and the IFC, yet still could not find a profitable path in Kenya’s fragmented retail supply chain. The company tried to scale a capital-intensive logistics model in a market with low margins and informal competitors. When the venture capital tap tightened, the debt became unsustainable.

Twiga is not alone, however. At least seven high-profile Kenyan startups have closed, entered administration, or scaled back in the past 16 months, according to PwC.

Copia Global, a rural e-commerce platform that raised USD 123 M and served over a million households through 30,000 agents, ended up in trouble and entered administration in May 2024 after failing to secure a critical USD 20 M injection. Copia ran an asset-heavy delivery network in low-density rural markets where logistics costs outpaced revenue.

Koko Networks, a clean-cooking company backed by Microsoft’s Climate Innovation Fund and a USD 179 M World Bank guarantee, shut down in January 2026 and laid off all 700 employees after the government blocked its carbon credit sales, cutting off a revenue stream that funded its subsidised bioethanol model.

Lipa Later, a buy-now-pay-later fintech that raised over USD 16 M and reached a valuation near USD 100 M, entered administration in March 2025 after failing to raise fresh funding. Sendy, a logistics startup valued at over USD 80 M, became insolvent in 2023 after a key investor pulled out of a down round.

Gro Intelligence, an AI-powered agriculture data company that raised USD 117 M and reached an USD 850 M valuation, closed in May 2024 after missing payroll and cutting 60% of its workforce. MarketForce, a notable well-funded B2B e-commerce player, also had to close shop after a string of challenges.

There is also the view that the funding environment is not the only issue, as Kenya lacks the kind of domestic capital that cushions startups in other markets. Local institutional investors have largely stayed on the sidelines, leaving foreign VCs to dominate deal flow. That dependency makes the ecosystem vulnerable to global sentiment shifts, as the 2024 funding drop demonstrated. Venture funding to Kenyan startups fell 33% that year to USD 318 M, after political unrest and new taxes spooked investors.

A self-reinforcing cycle appears to be at work. Without local capital, Kenyan startups cannot weather downturns. Without exits, local investors have little incentive to enter. Without equity-heavy scaling, unicorns never materialise. Twiga’s administration is the latest signal that the cycle won’t break on its own.