Kenya Technology, Innovation & Startup Report 2012: A

Preview
Introduction
Kenya has been identified in recent times as one of the countries to watch in
Africa as far as technology and innovation goes. Dubbed the Silicon Savanna,
Kenya is rising fast as a technology powerhouse on the African continent and
more so in Sub-Saharan Africa.
The mobile money revolution started in Kenya. To date it has been fairly hard to
replicate the success of mobile money in Kenya in the same way in other
countries and regions. MPESA has won Safaricom, the countrys leading Mobile
Network Operator (MNO) award after award and has broken record after record
for the volume of cash that passes through the mobile money system every
single day.
Ushahidi has borne testament to what young, passionate and talented Kenyans
can achieve by creating an innovative solution in a crisis situation that has gone
on to become an organization that hires great talent and whose innovative
technology has been used the world over.
In the last few years, the Kenyan government has also recognized the great
potential afforded by technology and innovation to move the country forward.
The ICT Board of Kenya was constituted to move the sector forward and has
come up with different initiatives to do so.
In 2008 SEACOM, a submarine fiber optic cable went live, connecting Kenya to
the world and opening up a world of new opportunities for the country to grow
its ICT sector. It was anticipated that this event would mark the beginning of

rapid growth as cost of bandwidth would come down and there would be a rise
in speed and reliability of the same, particularly for the Business Process
Outsourcing (BPO) industry. After SEACOM, EASSy and yet other submarine
fiber optic cable initiatives have come to bear creating massive digital tunnels
connecting the world to Africa and Kenya and Kenya to the world.
Kenyans have taken to the Internet like never before. The mobile web has
revolutionized Internet access, giving Kenyans access to the digital
superhighway. Young Kenyans have particularly taken to social networking and
the uptake of Facebook has been a phenomenon in itself.
Never before has the digital consciousness of the Kenyan people been as alive
as it is today.
Kenyans are not just consuming, they are creating, and they are innovating. This
report is a look at technology, innovation and startups in 2012 in Kenya. What
can we expect as the New Year unfolds? Which trends will become
mainstream? Will we see more and more tech innovation? Which startups, if
any, are poised for success in 2012? Which are the areas to invest in?
We talked to several influencers, thought leaders and pioneers of Kenyas digital
revolution to get there take on what the future holds for the country as far as
technology and innovation are concerned. We also researched a wide array of
materials from published papers, to research publications to blogs to get a clear
picture and objectively determine where the country is headed. Some of the
people we talked to include:
Erik Hersman co-founder of Ushahidi and the iHub ,
Jessica Colaco manager of the iHub, mobile evangelist and researcher,
John Karanja founder of Whive,
Kaburo Kobia, in charge of Local Content at the ICT Board of Kenya,

Kelly Murungi from Open Capital Advisors,
Sam Gichuru of the Nairobi Incubation Laboratory,
Liko Agosa, founder of PesaPal and Verviant Consulting and
Mark Mwongela the MD of Verviant.
The following is a compilation of what we found out. We looked at the following
areas in particular:
Mobile and Mobile Web
o Apps
o Mobile Money
o Mobile Web
Internet and Web
o Online services
o E-commerce
o Infrastructure
o Social networking and social media
Local content
Innovation, Startup Culture and Funding

A Little Context: Where we are coming from
There is a prevailing sense that Kenya is at a turning point. At the turn of the
year 2010-2011 the World Bank published a press release accompanying its
December 2012 Kenya Economic Update that showed that the overall Kenyan
economy was at a Tipping Point. The report estimated 4.9 percent growth in
2010 and 5.3 percent in 2011
The report specifically identified the telecommunications revolution as a key
driver to the economic growth of the country
The growth in ICT is significant and has out-performed all other sectors
over the last decade. Without ICT, Kenyas growth rate would have
been only 2.8 percent since 2000, barely exceeding population
growth. The report attributes the explosive growth in ICT to the
liberalization of the telecommunications sector, which induced
competition and innovation, resulting in considerable investment and job
creation.
The report argues that Kenya could develop into a regional hub of IT
innovations and IT-enabled services due to its cost advantages,
investment in enabling infrastructure including fiber optic cables and a
well educated and urbanized labor force. - Kenya at a Tipping Point for
Robust Growth Driven by the Telecommunications Revolution


Figure 1: Kenya's ICT Revolution
The latest Kenya Economic Update (December 2011) identifies 2012 as a
defining year for the Kenyan economy but still recognizes the vital role played by
the information, communications and technology field. According to
AllAfrica.coms article Kenya: WB - 2012 a Turning Point for Economy
Following the launch of the latest Kenya Economic update, a WB report
says that despite facing challenges including national elections, the
establishment of a new system of devolved government and the
possibility of a deteriorating global economy, that the "surging"
information and communications technology field could boost the
performance of a number of sectors, including transportation, agriculture
and infrastructure.
"Africa is on a growth path, but Kenya, particularly, has two advantages,"
Wolfgang Fengler, the World Bank's lead economist for the East African
region said. "(These advantages are) great people and a great location."
With the impressive success of MPESA and Ushahidi, theres also a sense of
expectation that it will happen again, someone will come up with something else
that will emulate the success of these two. So far there are many people trying

there hand at creating a successful technology company but the vast majority
are still at the startup stage.
Some of the people we interviewed to in the process of putting together this
report were of the opinion that weve talked about these two success stories
way too much. There needs to be more, we still have not seen critical mass as
far as successes go.