Kenya's vibrant internet footprint, high mobile phone penetration and youthful human resource makes it a preferred startup ecosystem in the continent.

The latest survey conducted by Kenyatta University and Maitri Capital looking at the country's investment climate says the country's $8.7 billion retail market offers multiple opportunities for investors.

According to the survey, the country has over 100 per cent mobile penetration, 90 per cent internet penetration and a rich profile of B2C e-commerce merchants, easing the cost of doing business.

Between January 2015 and November 2022, 242 tech startups raised a combined $1.28 billion So far in 2022.

Last year alone, they raised $506.6 million, almost doubling $291.9 million raised in 2021 and represents a record annual total for the ecosystem.

“Kenya has a well-established reputation as a pioneer in Africa’s tech space, as the home of the likes of M-Pesa, Ushahidi, and the iHub," the survey reads in part.

The survey which mapped 47 counties shows that 58 per cent of the startups in Kenya have a presence in Nairobi and have been expanding to the parts of the country.

Despite 53 per cent of them operating in Kenya, there is growing interested to expand to other East African countries as well as West Africa. Out of all the startups that took the survey, 91 per cent have tried to raise money from investors.

Only six per cent of the startups are using their own money, and three per cent did not answer.

Out of the 33 startups that tried to raise money, 97 per cent were able to get some through different ways, like loans, investments, and grants. Only two startups either got bought or merged with another company.

The survey reveals that raising money from investors is tough for most startups.

According to the study, 97 per cent of startups found it hard to get money, while only three per cent found it easy.

Most startups (65 per cent) are trying to get investments in exchange for part ownership of the company while some, 15 per cent are looking for a mix of loans and investments, and others (12 per cent) just want loans. A few (eight per cent per cent) are looking for grants or safe notes.

Kenya's startup ecosystem has come a long way in the last decade, with real growth beginning in 2016 and amplifying in 2020-2022.

Fintech is the most populated sub-sector of the Kenyan start-up space in terms of levels of activity with 93 firms, making up 30.2 per cent of the country’s ventures cementing its ability to solve fundamental problems at a time tech solutions are received well and quickly adopted.

Last year, at least 308 tech start-ups were in operation across Kenya, employing more than 11,000 people.

"The combination of a vibrant economy, Kenyans' willingness to try new and better solutions, resilience during difficult times like Covid-19, and a rapidly growing talent pool within the ecosystem make it one of the most attractive on the continent, if not globally," Poonam Vora of Maitri Capital Ltd said.

He adds that this is evidenced by founders moving to Kenya to start their businesses and global investors looking to invest in the country.

More work, however, is required to engage local business leaders, the corporate community, the academic bloc and the state for Kenyan startups to progress further.